Office of Examination and Insurance Report
CREDIT UNION ASSETS TOP $1 TRILLION
Industry Earns $2.1 Billion in First Quarter as
Membership Jumps More Than 650,000 to 92.5 Million
Key financial indicators for federally insured credit unions
largely improved in the first quarter of 2012, according to
Call Report data submitted to and compiled by the NCUA.
“The credit union industry reached important milestones in
late March. Credit unions’ total assets topped $1 trillion, and
the industry’s net worth exceeded $100 billion for the first
time,” said NCUA Board Chairman Debbie Matz. “Credit
unions now have the potential to lend to 667,000 more
members added in the first quarter, on top of the 1. 3 million
members added in 2011. In addition to membership reaching
92.5 million, delinquencies and charge-offs fell, and the
industry netted almost $2.1 billion in income.”
Total Assets, Net Worth, and Membership Hit
During the first three months of 2012, credit unions’ total
assets, net worth, and membership all hit new highs. Total assets
increased $40.1 billion or 4. 2 percent to end the quarter at just
over $1 trillion. Industry net worth grew by $2.1 billion to
$100.3 billion. Although the overall number of federally insured
credit unions fell a bit to 7,019 from 7,094, a record 92.5
million members belonged to a credit union as of March 31.
Industry Earnings Continue Upward Trends
Declines in interest expenses, reserving for loan losses, and
operating expenses, coupled with a rise in other operating
income, raised the credit unions’ net income. In the first three
months of 2012, credit unions booked nearly $2.1 billion in
net income, up $369.6 million from the prior quarter.
Notably, credit unions’ return on assets (ROA) ratio, an
important measure of industry earnings, stood at 84 basis
points as of March 31. ROA was up 17 basis points from the
year-end 2011. In all, the industry’s ROA has grown by 66
basis points since December 2009.
Deposits Climb Rapidly; Net Worth Ratio
Member shares continued to rise during the first three months
of 2012. Total savings at credit unions rapidly climbed to
$866.0 billion, a gain of $38.6 billion for the quarter. In
comparison, members’ total savings increased $41.0 billion
for all of 2011. In the first quarter, share drafts climbed 11. 4
percent, regular shares rose 8. 3 percent, money market funds
grew 3. 8 percent, and retirement accounts increased 1.0
percent. In contrast, non-member deposits and share
certificates fell 2. 2 percent and 0.6 percent, respectively.
The industry’s net worth ratio fell to 10.01 percent for the
quarter, as assets grew more quickly than net worth. The 20
basis point change in the ratio was the first quarterly decline
in a year. The ratio remains strong and exceeds the statutory
well-capitalized standard of 7.0 percent.
Delinquencies and Charge-Offs Fall, but
Bankruptcy Filings Rise
Credit unions reported declines in delinquencies and charge-offs during the first quarter. The industry’s delinquency ratio
dropped 16 basis points to 1.44 percent. The net charge-off
ratio fell 13 basis points to 0.78 percent. Despite these positive
declines, both ratios remain elevated above historic norms.
New bankruptcy filings by members also increased. For the
first three months of 2012, credit unions reported 70,938
members filing for bankruptcy, a 34.5 percent increase for
the quarter. However, the percentage of loans charged off due
to bankruptcy fell significantly to 20.69 percent of charged-off loans, a decrease of 318 basis points for the quarter.
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