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
Record Highs

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
Stays Strong

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.