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CU net worth strong shares grow says new NCUA data
ALEXANDRIA, Va. (3/2/10)—The National Credit Union Administration (NCUA) yesterday released end-of-year call report data for credit unions, figures that show a strong 10% net worth for credit unions at the end of 2009, but also show the economy has taken a toll on loan demand and delinquencies. Membership growth, however, was another strong positive in the reports. Membership in the nation’s 7,554 federally insured credit unions increased to nearly 90 million, and shares grew at a robust rate of 10.5%, as more Americans sought out credit unions as a safe place for financial services. “Credit union membership growth is impressive and encouraging. The ‘flight to safety’ that landed new deposits at credit unions during the economic downturn continues, as evidenced by credit union share growth in several categories,” noted NCUA Chairman Debbie Matz, in a release. “However,’ she added, “these positive developments are tempered by recognition of ongoing market stresses. This reality reinforces NCUA’s decision to increase examination staff and augment regulatory oversight to monitor and assist credit unions faced with persistent, adverse economic conditions.” High unemployment rates and a struggling economy were cited by the agency for the increase in delinquent loans as a percentage of total loans, which grew to 1.82%. The NCUA said credit unions continued to build provisions for loan losses as the ratio of net charge-offs to average loans grew to 1.21%, from 0.85%, during the year. Overall loan volume grew a paltry 1.1% and most of the growth, the NCUA noted, was in used automobile, credit card and first mortgage loans. Yet, net income returned to a positive $1.7 billion after a 2-year decline. This figure includes both National Credit Union Share Insurance Fund stabilization income and expense in 2009. “Data also suggests that, by improving cost management, credit unions reduced operating expenses and the return on average assets grew 24 basis points compared to year-end 2008,” the NCUA release noted. Details of major balance sheet items and member growth in federally insured credit unions from January through December 2009 include:
* Assets increased 9.08% to $884.8 billion from $811.1 billion; * Loans grew 1.1 % to $572.4 billion from $566.0 billion; * Shares increased 10.5% to $752.7 billion from $681.1 billion; * Investments increased 27.3% to $210.9 billion from $165.7 billion; * Net worth grew 1.9% to $87.7 billion from $86.1 billion; and * Membership increased 1.5% to 89.9 million from 88.6 million members.
The NCUA also reported:
* Because share growth significantly outpaced loan growth during 2009, the loan-to-share ratio declined to 76.05% from 83.1% posted at year-end 2008. This resulted in significant investment growth. * Within share accounts, regular shares, share drafts, and IRA/KEOGH accounts each posted double-digit increases, and money market shares grew a substantial 23.5%. Funds in federally insured credit union share certificates declined 0.2%. Lending saw used automobile loans gain 4.1%. First mortgage real estate loans and lines of credit grew 4.4% in 2009. Credit cards posted 6.6% increase, 2% lower than the 8.6% unsecured credit card debt posted in 2008. New automobile loans declined 7.7% and other types of real estate loans declined 4.3%. * To protect against potential losses, federally insured credit unions increased provisions for loan and lease losses by 34.1% during 2009 following a 120 %increase in 2008. Over $9.4 billion is now set aside to cover loan and lease losses. Delinquent loans grew 33.7 percent to a reported $10.4 billion.
Use the resource link below for the details for the December 2009 data.
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