ALEXANDRIA, Va. (11/24/08)—Call Report data as of Sept. 30 shows credit unions remain financially sound but are not unscathed by repercussions of the country’s current economic turmoil. The credit union system posted asset, loan and share growth, as well an increase in membership, according to the National Credit Union Administration (NCUA). However, return on average assets declined and net income decreased. The 15.7% net income decrease was primarily attributed to a 71.9% increase in provisions for loan and lease losses as credit unions reserve for possible losses. The NCUA also noted that the credit union data reflects current stress in the financial industry by an increase in delinquency ratios in all loan types. “Credit unions’ continued high level of net worth will help them weather today’s turbulent economy;” said NCUA Chairman Michael Fryzel in a release. “However, credit unions are not immune to financial stress, as noted in the delinquency increase in categories such as credit cards and mortgage loans.” Fryzel said the NCUA is “keeping a watchful eye on these adverse trends as part of a broader commitment to maintaining a safe and sound credit union industry.” Details of major balance sheet categories and membership growth in federally insured credit unions from Dec. 31, 2007, to Sept. 30, 2008, include:
* Assets increased 6.4% to $801.7 billion from $753.4 billion; * Loans increased 6.3% to $560.0 billion from $526.9 billion; * Investments increased 15.5% to $164.5 billion from $142.5 billion; * Shares increased 5.8% to $668.9 billion from $632.4 billion; * Net worth increased 5.21% to $89.5 billion from $86.2 billion; and * Membership increased 2.0% to 88.5 million members.
The NCUA also noted the loan-to-share ratio increased to 83.73% percent. First mortgage real estate loans and lines of credit expanded 13.6%, used automobile loans grew 5.6%, and unsecured credit card debt increased 4.5%. New automobile loans continued to fall marking a 5.4% decline so far in 2008. Regular shares increased 6.3% while money market shares increased 14.4%, share certificates increased 1.4% and IRA/KEOGH accounts increased 8.4%. Loan growth slightly outpaced savings, therefore pushing up the loan-to-share ratio to 83.7% from the 83.3% at year-end 2007. The loan delinquency ratio increased 20 basis points, up from .93% to 1.13%, and the net charge-off ratio increased from 0.51% to 0.75% during the first nine months of the year. The return-on-average-assets ratio dropped from 0.64% to 0.51%. Use the resource link below for complete details of third quarter 2008 data on the NCUA Consolidated Balance Sheet.