ALEXANDRIA, Va. (11/21/07)—The nation’s 8,163 federally insured credit unions continue to “diligently fulfill their mission” of being a major lending source for their members, according to third-quarter 2007 Call Report data just released by the National Credit Union Administration (NCUA). The NCUA noted that the loan-to-share ratio increased and is now at 82.66%. NCUA Chairman JoAnn Johnson said in a release, “A significant portion of loan growth can be attributed to real estate lending during the first nine months of 2007. “Looking at annualized figures, first mortgage real estate loans increased 12.49% and other types of real estate loans increased 8%. NCUA continues to stress the importance that credit unions offer their members safe, stable mortgage lending products.” Loan delinquencies also crept up a bit during the reporting period. The NCUA reported that credit union first mortgage fixed, hybrid, and balloon delinquency hit 0.44%, up from 0.28%, and first mortgage adjustable rate loan delinquency increased to 0.46% from 0.33%. Net charge-offs for first mortgage real estate remained constant from 2006 at 0.02%. Credit Union National Association Chief Economist Bill Hampel said Tuesday that CUNA’s monthly estimates of credit union data tracks very closely to the final NCUA numbers just released. “Our sample showed loans increasing by 5.4% in the first three quarters of 2007 compared to NCUA's 5.2%. Our savings estimate at 4.0% was just below the final 4.4% figure from NCUA,” Hampel said and noted: “Going forward, with a slowing economy we expect savings growth to accelerate and loan growth to slow.” CUNA has also noted an increase in delinquency recently. “According to our sample, the overall delinquency rate from 0.69% to 0.77% over the quarter. NCUA's final report shows the increase was a bit greater, to 0.82%,” Hampel said. Despite the rising delinquency, net charge-offs were virtually unchanged at 0.46% of loans outstanding during the quarter, according the CUNA, “We expect delinquency to rise to 1% or slightly more and charge-offs to 0.65% next year as the economy weakens and credit unions in some parts of the country experience collateral damage from the weak housing market. Although high by recent standards, these levels of delinquency and charge-offs are similar to those of the late 1990's,” Hampel added. The NCUA released the following details of annualized, major balance sheet categories and membership growth for the period spanning Dec. 31, 2006, to Sept. 30, 2007:
* Assets increased 6.5% to $744.4 billion from $709.9 billion; * Loans increased 6.7% to $519.2 billion from $494.4 billion; * Investments increased 5.5% to $186.7 billion from $179.5 billion; * Shares increased 6.0* to $628.1 billion from $601.2 billion; * Net worth increased 6.1% to $85.6 billion from $81.9 billion; and * Membership increased 1.9% to 86.97 million members.
Also, a shift in the share structure continued through the third quarter. Share certificates grew an annualized 14.4% to $209.3 billion, while money market shares grew 10.5% to $108.4 billion, and IRA/KEOGH accounts grew 10.3% to $56.0 billion. Regular shares declined an annualized 3.1% to $176.9 billion and share drafts declined 2.5% to $69.0 billion, which, the NCUA said, may indicate members are transferring funds, taking advantage of the often higher rates offered in money market accounts or share certificates. In addition to growth in mortgage lending, unsecured credit card loans expanded an annualized 7.21% to $28 billion and other types of unsecured loans increased 6.54% to $23.7 billion in the first nine months of the year. Loans for used automobiles grew 2.8% to $89.4 billion, and new automobile loan volume decreased a slight 0.47% to $88.2 billion. While gross income increased, the cost of funds and net operating expenses also increased. As a result, the return-on-average-assets remained at the 0.75% level reported at mid-year 2007. Use the resource link below to access CUNA’s Economic and Credit Union Forecast and to read third quarter 2007 data details in a consolidated balance sheet and a September 2007 NCUA Facts/Summary.