ALEXANDRIA, Va.–Federally insured credit unions reported net income growth of $11.9 billion in the second quarter of 2021, or 126.8%, over the same period in 2021, according to the latest financial performance data released by NCUA.
The agency said the increase in net income largely resulted from strong growth in other operating income and a decline in the provisioning for loan, lease, and credit loss expenses, similar to what the FDIC reported for its insured banks (see related story).
Insured shares and deposits rose $196 billion, or 14.2%, to $1.58 trillion when compared to the second quarter of 2020, NCUA said.
“During the second quarter of 2021, the credit union system, as a whole, remained on a solid footing,” said NCUA Chairman Todd M. Harper. “While the economic outlook shows signs of improvement, COVID-19 pandemic-relief programs are coming to an end and may result in uncertainty in the months ahead. Additionally, the pandemic’s economic disruptions hit the poorest households hardest. For these households, the recovery could take longer. The top priority for credit unions should be managing their operational and financial risks while continuing to work with members who are struggling.”
The Highlights
According to NCUA, highlights from its Quarterly Data Summary Report for the second quarter of 2021 include:
- Net income for federally insured credit unions in the second quarter of 2021 totaled $21.3 billion at an annual rate, up $11.9 billion, or 126.85, from the second quarter of 2020. Interest income declined $3.0 billion, or 4.9%, over the year to $57.9 billion. Non-interest income increased $5.1 billion, or 23.5%, to $26.7 billion, mainly due to growth in other operating income.
- The credit union system’s provision for loan and lease losses or credit loss expense declined $8.4 billion, or 86.2%, over the year, to $1.3 billion at an annual rate in the second quarter of 2021.
- Total loans outstanding increased $56.6 billion, or 5.0%, over the year to $1.19 trillion. The average outstanding loan balance in the second quarter of 2021 was $16,156, down $106, or 0.7%, from one year earlier. Credit union loan balances rose in most major categories compared with the second quarter of 2020, NCUA said.
- The delinquency rate at federally insured credit unions was 46 basis points in the second quarter of 2021, compared with 58 basis points in the second quarter of 2020. The agency said loan performance improved in major categories.
- Credit union shares and deposits rose by $224.2 billion, or 15.0%, over the year to $1.71 trillion in the second quarter of 2021. Regular shares increased $99.5 billion, or 18.9%, to $626.6 billion compared to the second quarter of 2020. Other deposits increased $41.8 billion, or 5.9%, to $745.4 billion, led by money market accounts. Those accounts were up $70.4 billion, or 23.1%, from the second quarter of 2020, NCUA said.
- The credit union system’s net worth increased by $18.1 billion, or 9.9%, over the year to $201.1 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.17% in the second quarter of 2021, down from 10.46% one year earlier.
Additional Resources
NCUA noted makes credit union system performance data available in the Credit Union Analysis section of NCUA.gov. The analysis section includes quarterly data summaries as well as detailed financial information, a graphics package illustrating financial trends in federally insured credit unions, and a spreadsheet listing all federally insured credit unions as of June 30, 2021, including key metrics.