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CUs Report Double Digit Year-over-Year Loan Growth "Credit News 24"

The National Credit Union Administration (NCUA) reported strong loan and deposit growth for federally-insured credit unions at the end of the third quarter of 2017.

Total loans outstanding at federally insured credit unions reached $847.1 billion at the end of the third quarter of 2017, an increase of 10.1 percent from one year earlier.

Every major loan category posted year-over-year growth. New auto loans grew the fastest at a rate of 15.8 percent to $112.2 billion. Outstanding net member business loans grew at the second fastest pace by 14 percent to $63.9 billion.

Insured shares and deposits in federally insured credit unions grew, for the first time, to more than $1 trillion.

As a result of loans growing at a faster pace than deposits (shares), this caused the industry's loan-to-share ratio to increase. The loans-to-shares ratio was 78.6 percent, up from 77.8 percent at the end of the second quarter of 2017 and 77.5 percent a year earlier.

Net Income Up 5.7 Percent

Net income at federally-insured credit unions increased by 5.7 percent from one year ago to an annualized net income of $9.7 billion through the first three quarters of 2017.

Gross income at credit unions rose by $4.7 billion to $59.3 billion as of September 2017. Offsetting the increase in gross income was an increase in non-interest expense by $2.55 billion and interest expense by .52 billion. In addition, provisions for loan and lease losses jumped by $1.1 billion to $4.7 billion. Operating expenses as of September 2017 were 65.43 percent of gross income.

The annualized return on average assets ratio for federally insured credit unions stood at 78 basis points on September 30, 2017, down from 80 basis points a year earlier. The median return on average assets was 37 basis points at an annual rate during the first three quarters of 2017, up slightly from 36 basis points a year earlier.

Almost 98 Percent of CUs Are Well-Capitalized

The industry's aggregate net worth ratio was 10.85 percent as of the end of September, the same as the previous quarter. One year earlier, the system’s aggregate net worth ratio was 10.99 percent.

NCUA reported that 97.9 percent of federally insured credit unions were well-capitalized. At the end of the third quarter of 2017, less than 1.0 percent of federally insured credit unions were undercapitalized.

Delinquency Rate Flat, Net Charge-Off Rate Up

Credit union reported holding approximately $6.5 billion in delinquent loans. This was up from almost $6 billion one year earlier. The overall delinquency rate was largely unchanged -- down 1 basis point from one year ago at 77 basis points. Over the last year, the delinquency rates on member business loans and credit card loans jumped by 41 basis points to 1.52 percent and by 7 basis points to 1.04 percent, respectively.

Net charge-offs are up $930 million from a year earlier to $4.4 billion. The net charge-off rate was up 7 basis points from a year ago to 53 basis points.

NCUA also noted that credit unions with at least $500 million in assets continued to outperform smaller credit unions.

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Title : CUs Report Double Digit Year-over-Year Loan Growth "Credit News 24"
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