ALEXANDRIA, Va.—Assets in federally insured CUs topped $1.42 trillion at the close of the first quarter of 2018, according to the latest data from NCUA.
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 2018. Credit unions with less than $100 million in assets reported declines in loans, membership, and net worth over the year.
Total assets in FICUs rose by $79 billion, or 5.9%, over the year ending in the first quarter of 2018. Total loans outstanding increased $87 billion, or 9.9%, over the year to $971.9 billion. The average outstanding loan balance in the first quarter of 2018 was $15,039, up $541, or 3.7%, from one year earlier, NCUA reported.
The delinquency rate at federally insured credit unions was 66 basis points in the first quarter of 2018, down slightly from one year earlier. The net charge-off ratio was 60 basis points, up from 58 basis points in the first quarter of 2017.
Insured shares and deposits rose $58 billion, or 5.5%, over the four quarters ending March 2018, to $1.13 trillion.
Among the Q1 data released by NCUA:
Loans To Shares
The loan-to-share ratio stood at 80.8% in the first quarter of 2018, up from 77.7% in the first quarter of 2017. The credit union system’s net worth ratio was 10.88% in the first quarter of 2018, compared with 10.69% one year earlier.
Net income totaled $12.6 billion at an annual rate in the first quarter of 2018, up $3.3 billion, or 35.4%, from the same period a year ago. The net interest margin for federally insured credit unions was $42.3 billion in the first quarter of 2018, or 3.0% of average assets, compared to $38.0 billion, or 2.9% of average assets, in the first quarter of 2017, NCUA stated.
The return on average assets for federally insured credit unions was 90 basis points over the year ending in the first quarter of 2018, up from 71 basis points in the first quarter of 2017. The median return on average assets across all federally insured credit unions was 48 basis points, up 15 basis points from the first quarter of 2017.
CUs Numbers Fall
The number of federally insured credit unions declined to 5,530 in the first quarter of 2018 from 5,737 in the first quarter of 2017. In the first quarter of 2018, there were 3,477 federal credit unions and 2,053 federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-running industry consolidation trends, NCUA said.
The number of credit unions with a low-income designation rose to 2,544 in the first quarter of 2018 from 2,518 one year earlier. Federally insured credit unions added 4.7 million members over the year, and credit union membership in these institutions reached 112.7 million in the first quarter of 2018.
Balance Sheet
Cash and equivalents (assets with maturity of three months or less) rose $0.5 billion, or 0.4%, to $121.6 billion, while total investments (instruments with maturities in excess of three months) fell $12.8 billion, or 4.6%, to $262.6 billion:
- Investments with maturities of less than one year declined $4.8 billion, or 6.2%, to $72.4 billion.
- Investments with maturities of one to three years declined $6.4 billion, or 7.0%, to $84.2 billion.
- Investments with maturities of three to five years declined $2.5 billion, or 3.5%, to $67.1 billion.
- Investments with maturities of five to 10 years rose by $1 billion, or 2.9%, to $34.8 billion.
- Investments with maturities greater than 10 years fell $0.1 billion, or 3.2%, to $4.1 billion.
Total Loans
Total loans outstanding increased $87.3 billion, or 9.9%, over the year to $971.9 billion. NCUA said credit union loan balances rose over the year in every major category, compared with the first quarter of 2017:
- Loans secured by 1-4 family residential properties totaled $418.4 billion in the first quarter of 2018; data are unavailable prior to 2017Q3, NCUA said. Auto loans increased $33.4 billion, or 10.9%, to $340.2 billion. Used auto loans rose $18.8 billion, or 10.0%, to $205.6 billion. New auto loans rose $14.6 billion, or 12.2%, to $134.6 billion.
- Credit card balances rose $5.1 billion, or 10.0%, to $56.7 billion
- Non-federally guaranteed student loans rose $0.6 billion, or 13.9%, to $4.6 billion.
- Commercial loans, excluding unfunded commitments, totaled $65.4 billion in the first quarter of 2018; data are unavailable prior to 2017Q3. Commercial loans are not directly comparable to member business loans, NCUA said.
The delinquency rate at federally insured credit unions was 66 basis points in the first quarter of 2018, down from 69 basis points one year earlier. Loan performance improved in most categories:
- The delinquency rate on fixed real estate loans was 35 basis points in the first quarter, down from 38 basis points one year earlier.
- The credit card delinquency rate was 124 basis points, up from 109 basis points in the first quarter of 2017.
- For auto loans, the delinquency rate was 55 basis points in the first quarter of 2018 compared with 57 basis points one year earlier.
- The delinquency rate for commercial loans, excluding unfunded commitments, was 145 basis points in the first quarter of 2018; data for quarters prior to 2017Q3 are not available.
Charge-Offs
The net charge-off ratio for all federally insured credit unions was 60 basis points in the first quarter of 2018, up from 58 basis points in the first quarter of 2017.
Credit union shares and deposits rose by $65.5 billion, or 5.8%, over the year to $1.20 trillion in the first quarter of 2018. Regular shares rose $28.5 billion, or 6.8%, to $445.0 billion. Other deposits increased $22.4 billion, or 4.0%, to $577.9 billion, led by share certificate accounts, which were up $13.7 billion, or 6.8%, and money market accounts, which rose $7.6 billion, or 3.0%.
The credit union system’s net worth increased by $11.1 billion, or 7.8%, over the year to $154.2 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.88% in the first quarter of 2018, up from 10.69% one year earlier.
Net Income
Net income for federally insured credit unions in the first quarter of 2018 totaled $12.6 billion at an annual rate, up $3.3 billion, or 35.4%, from the first quarter of 2017.
Interest income rose $5.9 billion, or 13.2%, over the year to $50.7 billion, and non-interest income increased $3.1 billion, or 18.2%, to $20.0 billion. The increase in non-interest income partly reflected the recognition of the Share Insurance Fund equity distribution scheduled to be paid later this year, NCUA said.
Interest expense totaled $8.4 billion annualized in the first quarter of 2018, up $1.6 billion, or 23.3%, from one year earlier. Non-interest expenses grew $3.1 billion, or 7.7%, over the year to $43.0 billion in the first quarter. Rising labor expenses, which were up $1.5 billion, or 7.2%, accounted for half of the increase in non-interest expenses.
The aggregate net interest margin widened $4.3 billion over the year, or 11.3%, to $42.3 billion at an annual rate in the first quarter of 2018.
The credit union system’s provision for loan and lease losses rose $1.0 billion over the year, or 17.8%, to $6.7 billion at an annual rate in the first quarter of 2018.
Performance by asset category
The number of federally insured credit unions with assets of at least $1 billion increased to 294 in the first quarter of 2018 from 278 in the first quarter of 2017. These 294 credit unions held $906.6 billion in assets, or 64% of total system assets. Credit unions in this category reported loan growth of 13.5%. Membership rose 9.1%. Net worth increased 11.5%.
The number of federally insured credit unions with assets of at least $500 million but less than $1 billion increased to 245 in the first quarter of 2018 from 239 in the first quarter of 2017. These 245 credit unions held $174.9 billion in total assets, or 12% of total system assets. Credit unions in this category reported loan growth of 5.9%. Membership increased 3.2%. Net worth increased 4.3%.
The number of federally insured credit unions with at least $100 million but less than $500 million in assets declined to 1,040 in the first quarter of 2018 from 1,053 in the first quarter of 2017. These 1,040 credit unions held $233.9 billion in total assets, or 17% of total system assets. Credit unions in this category reported loan growth of 2.9%. Membership declined 1.8%. Net worth increased 1.9%.
The number of federally insured credit unions with at least $50 million but less than $100 million in assets fell to 704 in the first quarter of 2018 from 731 in the first quarter of 2017. These 704 credit unions held $50.5 billion in total assets, or 4% of total system assets. Credit unions in this category reported a 0.3% decline in total loans. Membership declined 4.9%. Net worth decreased 0.9%.
The number of federally insured credit unions with assets of at least $10 million but less than $50 million declined to 1,761 in the first quarter of 2018 from 1,828 in the first quarter of 2017. These credit unions held $44.2 billion in assets, or 3% of total system assets. Credit unions in this category reported a 0.1% decline in loans. Membership declined 5.0%. Net worth declined 1.1%.
The number of federally insured credit unions with less than $10 million in assets declined to 1,486 in the first quarter of 2018 from 1,608 in the first quarter of 2017. These credit unions held $6.2 billion in assets, or less than 1.0% of total system assets. Credit unions in this category reported a 6.0% decline in loans. Membership fell 9.5%. Net worth declined 5.9%.