ALEXANDRIA, Va.–Overall credit union membership and total loans in every asset category below $1 billion declined in the year ending in the third quarter of 2020, according to new data released by NCUA.
The declines in member growth and loan performance are masked by the overall CU performance numbers. Driven by CUs of $1 billion or more, total assets in federally insured credit unions rose by $248 billion, or 16.1%, for the year ending Sept. 30 to $1.70 trillion, while total assets were up $69 billion, or 6.3%, over the year to $1.2 trillion, according to new data released by NCUA for the 5,133 federally insured credit unions as of Sept. 30, 2020.
Not surprisingly, the latest data show declines in net interest margins and ROA as total membership slowly approaches 124 million people. The agency’s analysis noted loan balances were up in most categories compared to the second quarter, but again, only among the largest CUs.
Here’s how credit unions performed by category, according to NCUA’s Quarterly Credit Union Data Summary:
Performance By Asset Category
According to the data released by NCUA:
■ The number of federally insured credit unions with assets of at least $1 billion increased to 364 in the third quarter of 2020 from 319 in the third quarter of 2019. These 364 credit unions held $1.3 trillion in assets, or 71% of total system assets. Credit unions in this category reported loan growth of 11.8%. Membership rose 10.6 %. Net worth increased 11.9 %, NCUA said.
■ The number of federally insured credit unions with assets of at least $500 million but less than $1 billion rose to 272 in the third quarter of 2020 from 255 in the third quarter of 2019. These 272 credit unions held $191.0 billion in total assets, or 11% of total system assets. Credit unions in this category reported a 1.9% decline in total loans outstanding over the year. Membership fell 4.5 %, and net worth decreased 2.8 %.
■ The number of federally insured credit unions with at least $100 million but less than $500 million in assets increased to 1,063 in the third quarter of 2020 from 1,012 in the third quarter of 2019. These 1,063 credit unions held $235.9 billion in total assets, or 13% of total system assets. Credit unions in this category reported a 6.1% decline in total loans outstanding. Membership fell 6.5 %. Net worth fell 3.5 %.
■ The number of federally insured credit unions with at least $50 million but less than $100 million in assets declined to 674 in the third quarter of 2020 from 682 in the third quarter of 2019. These 674 credit unions held $48.4 billion in total assets, or 3% of total system assets. Credit unions in this category reported a 12.2% decrease in total loans. Membership fell 12.5 %. Net worth declined 7.1 %.
■ The number of federally insured credit unions with assets of at least $10 million but less than $50 million declined to 1,561 in the third quarter of 2020 from 1,661 in the third quarter of 2019. These credit unions held $40.1 billion in assets, or 2% of total system assets. Credit unions in this category reported a 15.8% decrease in loans. Membership declined 13.5 %. Net worth fell 10.4 %.
■ The number of federally insured credit unions with less than $10 million in assets declined to 1,199 in the third quarter of 2020 from 1,352 in the third quarter of 2019. These credit unions held $5.0 billion in assets, or 0.3% of total system assets. Credit unions in this category reported a 21.3% decline in loans. Membership fell 16.4 %. Net worth declined 14.1 %.
Assets
■ Cash and equivalents (assets with maturity of three months or less) increased $93.3 billion, or 80.6%, to $209.1 billion.
■ Total investments (instruments with maturities in excess of three months) rose $75.6 billion, or 29.0%, to $336.6 billion.
■ Investments with maturities less than or equal to one year rose $19.3 billion, or 24.5%, to $97.9 billion.
■ Investments with maturities of one to three years rose $22.2 billion, or 23.8%, to $115.6 billion.
■ Investments with maturities of three to five years increased $12.9 billion, or 24.0%, to $66.5 billion.
■ Investments with maturities of five to 10 years rose $14.9 billion, or 49.8%, to $44.7 billion.
■ Investments with maturities greater than 10 years increased $6.4 billion, or 116.4%, to $11.8 billion.
■ Total loans outstanding increased $69 billion, or 6.3%, over the year, to $1.2 trillion. Credit union loan balances rose in most major categories, compared with the second quarter of 2019, NCUA said.
■ Loans secured by 1- to 4-family residential properties increased $42.1 billion, or 9.0%, to $508.8 billion in the third quarter of 2020.
■ Auto loans increased $4.6 billion, or 1.2%, to $378.8 billion. Used auto loans rose $10.1 billion, or 4.4%, to $237.0 billion, while new auto loans fell $5.5 billion, or 3.75%, to $141.9 billion.
■ Credit card balances declined $3.1 billion, or 4.9%, to $60.7 billion.
■ Non-federally guaranteed student loans rose $0.5 billion, or 9.1%, to $6.0 billion.
■ Commercial loans, excluding unfunded commitments, increased $13.1 billion, or 16.8%, over the year to $91.3 billion in the third quarter of 2020. Commercial loans are not directly comparable to member business loans.
■ The delinquency rate at federally insured credit unions was 55 basis points in the third quarter of 2020, down 11 basis points compared with the third quarter of 2019. Loan performance improved in most major categories, NCUA said.
■ The delinquency rate on fixed-rate real estate loans was 40 basis points in the third quarter, down four basis points compared with the third quarter of 2019.
■ The credit card delinquency rate fell to 87 basis points from 132 basis points one year earlier.
■ For auto loans, the delinquency rate declined 14 basis point to 44 basis points in the third quarter of 2020.
■ The delinquency rate for commercial loans, excluding unfunded commitments, was 76 basis points in the third quarter of 2020, compared with 70 basis points in the third quarter of 2019.
■ The net charge-off ratio for all federally insured credit unions was 48 basis points in the third quarter of 2020, compared with 55 basis points in the third quarter of 2019.
Liabilities and Net Worth
■ Credit union shares and deposits rose by $236.4 billion, or 18.3%, over the year to $1.53 trillion in the third quarter of 2020. Regular shares increased $100.7 billion, or 22.7%, to $543.8 billion. Other deposits increased $68.1 billion, or 10.5 %, to $717.0 billion, led by money market accounts, which were up $55.5 billion, or 20.8%.
■ The credit union system’s net worth increased by $11.3 billion, or 6.5 %, over the year to $186.5 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.43% in the third quarter of 2020, down from 11.38%one year earlier.
■ Net income for federally insured credit unions in the third quarter of 2020 totaled $11.0 billion at an annual rate, down $3.7 billion, or 25.1%, from the third quarter of 2019. Interest income declined $0.3 billion, or 0.5 %, over the year to $60.5 billion, while non-interest income increased $2.0 billion, or 9.3%, to $23.0 billion.
■ Interest expense totaled $12.4 billion annualized in the third quarter of 2020, down $0.7 billion, or 5.0 %, from one year earlier. Non-interest expenses grew $2.9 billion, or 6.2%, over the year to $50.7 billion in the third quarter. Rising labor expenses, which were up $2.0 billion, or 8.2 %, accounted for more than two-thirds of the increase in non-interest expenses.
■ The aggregate net interest margin widened by $0.4 billion, or 0.7 %, over the year to $48.1 billion at an annual rate in the third quarter of 2020.
■ The credit union system’s provision for loan and lease losses or credit loss expense rose $3.0 billion, or 47.6 %, over the year, to $9.4 billion at an annual rate in the third quarter of