NEW YORK–Nearly 1,000 credit unions reported a net loss during the first quarter of 2020, in part because many set aside additional loan loss provisions, according to S&P Global Market Intelligence.
The percentage of credit unions recording a net loss during Q1 rose, but also remained on a longer-term downward trajectory, according to the company’s analysis. The numbers were first reported by the Cooperative Credit Union Association.
According to S&P Global Market Intelligence, for the three months ended March 31 982 credit unions, representing 18.5% of the U.S. CU community, lost money. The percentage of money-losers was between 13% and 15% in the first quarters of 2018 and 2019, and 21% to 35% from 2010 to 2017. First-quarter losses peaked in 2009, when more than three-quarters of the industry spilled red ink, according to the CCUA report.
Boeing Employees CU (BECU) in Tukwila, Wash., reported losing $61 million during Q1, the largest of any credit union. BECU’s primary sponsor has seen huge cutbacks as the result of the sharp decline in travel, and the credit union is among the most experienced in dealing with a sponsor with frequent booms and busts. During Q4 2019, BECU reported $94.8 million in net income.
Other Red Numbers
Other credit unions that also reported red numbers during Q1, according to S&P Global Market Intelligence include Rochester, N.Y.-based ESL FCU; Live Oak, Texas-based Randolph-Brooks FCU; Dubuque, Iowa-based Dupaco Community CU, and Lenexa, Kan.-based CommunityAmerica CU, which the company said suffered substantial interest income trading losses. In the first three months of 2020, ESL FCU reported a loss of $40.4 million, according to the report.
S&P Global Market Intelligence said escalating credit loss provisions caused net losses at Chicago-based Alliant CU and Phoenix-based Arizona FCU. The latter's provision jumped to $25.4 million from $197,000 in the first quarter of 2019.