ALEXANDRIA, Va.–Credit union assets grew strongly during the first quarter of this year over one quarter earlier, even as membership growth showed signs of cooling its torrid pace, according to new data released by NCUA.
One trendline that continues: credit unions with assets of at least $1 billion reported the strongest growth in loans, membership, and net worth over the year ending in the first quarter of 2019. Credit unions with less than $100 million in assets reported declines in those categories over the year, NCUA reported.
Overall, total assets at credit unions grew by $90 billion during Q1, while membership growth grew 3.82%, down from 4.38% in the final quarter of 2018. Loans were up $76-billion, according to NCUA.
The numbers were released as part of the agency’s Quarterly Data Summary Reports, which include an overview of the quarterly Call Report data as well as tables showing the recent history of major credit union performance indicators. The analysis section includes quarterly data summaries as well as detailed financial information and a graphics package illustrating financial trends in federally insured credit unions.
The NCUA data is based on call reports filed as of March 31 by 5,335 federally insured credit unions representing 117.3 million members. The full report can be found in CUToday.info’s The Gov here. http://www.cutoday.info/THE-gov/
The Data Points
Among the data points:
- Total assets in federally insured credit unions rose by $90 billion, or 6.3%, over the year ending in the first quarter of 2019, to $1.51 trillion.
- Total loans outstanding increased $76 billion, or 7.9%, over the year to $1.0 trillion. The average outstanding loan balance in the first quarter of 2019 was $15,420, up $385, or 2.6%, from one year earlier.
- The delinquency rate at federally insured credit unions was 58 basis points in the first quarter of 2019, down from 66 basis points from one year earlier. The net charge-off ratio was 57 basis points, down slightly from 60 basis points in the first quarter of 2018.
- Insured shares and deposits rose $62 billion, or 5.5%, over the four quarters ending in the first quarter of 2019 to $1.19 trillion.
- The loan-to-share ratio stood at 82.4% in the first quarter of 2019, up from 80.8% in the first quarter of 2018.
- The credit union system’s net worth ratio was 11.14% in the first quarter of 2019, compared with 10.89% one year earlier.
- Net income totaled $14.1 billion at an annual rate in the first quarter of 2019, up $1.5 billion, or 11.9%, from the same period a year ago.
- The net interest margin for federally insured credit unions was $46.1 billion in the first quarter of 2019, or 3.1% of average assets. That compares with $42.4 billion, or 3.1% of average assets, in the first quarter of 2018.
- The return on average assets for federally insured credit unions was 95 basis points over the year ending in the first quarter of 2019, up from 90 basis points in the first quarter of 2018. The median return on average assets across all federally insured credit unions was 56 basis points, up 8 basis points from the first quarter of 2018.
- The number of federally insured credit unions declined to 5,335 in the first quarter of 2019 from 5,530 in the first quarter of 2018. In the first quarter of 2019, there were 3,350 federal credit unions and 1,985 federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-running industry consolidation trends.
- The number of credit unions with a low-income designation rose to 2,571 in the first quarter of 2019 from 2,544 one year earlier.
Balance Sheet Details
The NCUA Q1 data also show:
Assets
- Total assets in federally insured credit unions rose by $90 billion, or 6.3%, over the year to $1.51 trillion in the first quarter of 2019.
- Cash and equivalents (assets with maturity of three months or less) increased $9.7 billion, or 8.0%, to $131.3 billion.
- Total investments (instruments with maturities in excess of three months) fell $3.9 billion, or 1.5%, to $258.7 billion.
- Investments with maturities of less than one year rose $2.9 billion, or 4.0%, to $75.2 billion.
- Investments with maturities of one to three years rose $2.1 billion, or 2.5%, to $86.3 billion.
- Investments with maturities of three to five years fell $8.7 billion, or 13.0%, to $58.4 billion.
- Investments with maturities of five to 10 years edged down $0.4 billion, or 1.0%, to $34.5 billion.
- Investments with maturities greater than 10 years increased $0.2 billion, or 5.4%, to $4.3 billion.
- Total loans outstanding increased $76 billion, or 7.9%, over the year to $1.0 trillion. Credit union loan balances rose over the year in every major category, compared with the first quarter of 2018.
- Loans secured by 1- to 4-family residential properties increased $30.2 billion, or 7.2%, to $449.2 billion in the first quarter of 2019.
- Auto loans increased $26.2 billion, or 7.7%, to $366.5 billion. Used auto loans rose $14.8 billion, or 7.2%, to $220.5 billion. New auto loans rose $11.4 billion, or 8.5%, to $146.0 billion.
- Credit card balances rose $4.4 billion, or 7.7%, to $61.1 billion.
- Non-federally guaranteed student loans rose $0.8 billion, or 16.8%, to $5.3 billion.
- Commercial loans, excluding unfunded commitments, increased $7.8 billion, or 12.0%, over the year to $73.1 billion in the first quarter of 2019. Commercial loans are not directly comparable to member business loans.
- The delinquency rate at federally insured credit unions was 58 basis points in the first quarter of 2019, down from 66 basis points one year earlier. Loan performance improved in most categories:
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- The delinquency rate on fixed real estate loans was 31 basis points in the first quarter, down from 35 basis points one year earlier.
- The credit card delinquency rate was 126 basis points, up from 124 basis points in the first quarter of 2018.
- For auto loans, the delinquency rate was 53 basis points in the first quarter of 2019 compared with 55 basis points one year earlier.
- The delinquency rate for commercial loans, excluding unfunded commitments, was 62 basis points in the first quarter of 2019, down from 146 basis points in the first quarter of 2018.
- The net charge-off ratio for all federally insured credit unions was 57 basis points in the first quarter of 2019, compared with 60 basis points in the first quarter of 2018.
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Liabilities and Net Worth
- Credit union shares and deposits rose by $69.3 billion, or 5.8%, over the year to $1.27 trillion in the first quarter of 2019. Regular shares rose $17.2 billion, or 3.9%, to $462.6 billion. Other deposits increased $43.1 billion, or 7.5%, to $621.0 billion, led by share certificate accounts, which were up $38.7 billion, or 18.0%, and non-member deposits, which rose $1.8 billion, or 17.7%.
- The credit union system’s net worth increased by $13.5 billion, or 8.8%, over the year to $167.8 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 11.14% in the first quarter of 2019, up from 10.89% one year earlier.
Income Statement Details
- Net income for federally insured credit unions in the first quarter of 2019 totaled $14.1 billion at an annual rate, up $1.5 billion, or 11.9%, from the first quarter of 2018. Interest income rose $7.5 billion, or 14.8%, over the year to $58.3 billion, and non-interest income increased $0.5 billion, or 2.6%, to $20.5 billion.
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Interest expense totaled $12.2 billion annualized in the first quarter of 2019, up $3.8 billion, or
45.3%, from one year earlier. Non-interest expenses grew $3.1 billion, or 7.2%, over the year to $46.2 billion in the first quarter. Rising labor expenses, which were up $1.7 billion, or 7.4%, accounted for roughly half of the increase in non-interest expenses. - The aggregate net interest margin widened by $3.7 billion over the year, or 8.8%, to $46.1 billion at an annual rate in the first quarter of 2019.
- The credit union system’s provision for loan and lease losses or credit loss expense declined $0.3 billion over the year, or 5.0%, to $6.4 billion at an annual rate in the first quarter of 2019.
Performance By Asset Category
NCUA noted that consistent with long-running trends, credit unions with assets of at least $1 billion reported the strongest growth in loans, membership, and net worth over the year ending in the first quarter of 2019. Credit unions with less than $100 million in assets reported declines in those categories over the year.
- The number of federally insured credit unions with assets of at least $1 billion increased to 315 in the first quarter of 2019 from 294 in the first quarter of 2018. These 315 credit unions held $1.0 trillion in assets, or 67% of total system assets. Credit unions in this category reported loan growth of 11.3%. Membership rose 9.4%. Net worth increased 13.1%.
- The number of federally insured credit unions with assets of at least $500 million but less than $1 billion rose to 255 in the first quarter of 2019 from 245 in the first quarter of 2018. These 255 credit unions held $179.2 billion in total assets, or 12% of total system assets. Credit unions in this category reported a 3.2% increase in total loans outstanding over the year. Membership rose 1.3%, and net worth increased 4.6%.
- The number of federally insured credit unions with at least $100 million but less than $500 million in assets declined to 1,022 in the first quarter of 2019 from 1,040 in the first quarter of 2018. These 1,022 credit unions held $227.0 billion in total assets, or 15% of total system assets. Credit unions in this category reported a 0.2% decline in total loans outstanding. Membership fell 5.0%. Net worth edged down 0.4%.
- The number of federally insured credit unions with at least $50 million but less than $100 million in assets declined to 684 in the first quarter of 2019 from 704 in the first quarter of 2018. These 684 credit unions held $49.2 billion in total assets, or 3% of total system assets. Credit unions in this category reported a 0.4% decrease in total loans. Membership fell 4.0%. Net worth was unchanged.
- The number of federally insured credit unions with assets of at least $10 million but less than $50 million declined to 1,682 in the first quarter of 2019 from 1,761 in the first quarter of 2018. These credit unions held $42.4 billion in assets, or 3% of total system assets. Credit unions in this category reported a 0.4% increase in loans. Membership declined 5.1%. Net worth edged up 0.1%.
- The number of federally insured credit unions with less than $10 million in assets declined to 1,377 in the first quarter of 2019 from 1,486 in the first quarter of 2018. These credit unions held $5.7 billion in assets, or less than 0.5% of total system assets. Credit unions in this category reported a 2.2% decline in loans. Membership fell 7.9%. Net worth declined 3.6%.