8 takeaways from NCUA's Q4 state-level data

By Credit Union Journal staff , Melissa Angell, Aaron Passman, Jackie Stewart

March 25, 2020 3:34 PM

There continues to be a wide gap in performance for credit unions in various states.

Once again that’s a big takeaway from the National Credit Union Administration’s Quarterly U.S. Map Review. The fourth-quarter data highlights that credit unions in states such as Maine and New Mexico continue to thrive while institutions in other regions, including Arkansas and New Jersey, face more challenges.

However, the overall picture was bright for the majority of credit unions. Most institutions turned a profit, the median return on average assets ticked up and the median total delinquency rate crept down.

A look at first quarter, second quarter and third quarter coverage can be found here. Analysis of the recent on NCUA’s national trends report can be found here.

Read on for details from the state-by-state analysis.

Passman, Aaron

Loan growth

NCUA reported national media loan growth of 3.1% for the year ending Dec. 31, 2019, a drop of nearly three percentage points from the 5.9% figure seen just one year prior. That December 2019 figure represents a continued decline from the previous quarter; growth at the end of September stood at 3.8%.

Still, median loan growth was positive in all but three states at the end of 2019, with Idaho and Delaware closing out the year strongest at 7% and 6.8%, respectively. At the median loan growth was in the red in Arkansas (-1.2%), New Jersey (-1%) and Arizona (-0.4%) while Louisiana saw the lowest median growth rate (0.4%) followed by Oklahoma and Connecticut, which both saw loans grow just 1.3%.

Passman, Aaron

Membership growth

Credit union membership continued to grow in 2019, though median membership levels were unchanged. That’s down slightly from the 0.2% membership growth posted in the fourth quarter of 2018.

Smaller credit unions were more likely to see membership fall. The credit union industry had 120.4 million members through the end of 2019, according to the NCUA's 2019 Annual Report.

CUs headquartered in New Mexico recorded the highest membership growth at 1.9%, followed by Alaska and Idaho, which saw membership grow by 1.7%.

Twenty-two states and Washington, D.C., posted declines in their memberships. Pennsylvania and Arkansas had the biggest drops while Texas, Utah and Wyoming remained flat from the pervious year.

Passman, Aaron

Asset growth

Total assets reached $1.57 trillion through the end of 2019. The median asset growth continued to climb at 2.8%, up nearly one percentage point from the year prior.

Maine and Alaska had the highest median asset growth at 7.1% and 6.8%, respectively. New Jersey credit unions reported a decline in median assets at -0.8% while Arkansas had the lowest growth rate at 0.5%, followed by Mississippi at 0.8%.

Loan-to-share ratios

The nation’s median loan-to-share ratio climbed slightly, rising from 70% at the end of Q4 2018 to 71% at the end of 2019. The national median was also 71% at the end of Q3 2019.

As in the prior quarter, Vermont and Wisconsin had the highest median loan-to-share ratios, at 91% and 88%, respectively, at the close of Q4. Delaware and New Jersey had the lowest medians, at 52% each, while Hawaii posted a slightly higher ratio at 54%. Those three states also rounded out the bottom of the state rankings at the end of Q3.

ROA

Institutions in New Mexico continued to lead the country for median return on average assets at 96 basis points. Nevada came in second at 94 basis points. Connecticut had the lowest median return (36 basis points) while New Jersey credit unions posted an ROA of 38 basis points.

Nationwide, the industry’s median ROA ticked up 4 basis points, to 60 basis points, from a year earlier.

Share and deposit growth

Credit union shares and deposits increased by a median of 2.6% through the fourth quarter in 2019, double the rate a year earlier. Insured shares and deposits through the end of 2019 totaled $1.22 trillion.

Idaho and Maine both saw the highest median growth rate in shares and deposits at 7.2%, followed by Vermont at 6.7%.

New Jersey and Arkansas posted declines in their deposits at -1.4% and -0.5%, respectively. Mississippi and Pennsylvania had the smallest growth at 0.4% and 0.7% respectively.

Delinquencies

The median delinquency rate at federally insured credit unions fell slightly to 66 basis points, down from 69 basis points one year prior. In a continuation of long-running trends, New Jersey saw the nation’s highest median delinquency rate (142 basis points) followed by Louisiana at 120 basis points. New Hampshire and Oregon recorded the lowest rates, at 30 and 34 basis points, respectively.

Net income

The vast majority of credit unions — 89% — earned money last year. That’s up one percentage point from 2018. At least three quarters of institutions in every state and Washington, D.C., were profitable during 2019.

All federally insured credit unions in New Hampshire, Vermont and Alaska earned money while 98% of institutions in Hawaii, New Mexico, Oregon and Maine turned a profit.

Rhode Island posted the lowest percentage of institutions earning money at 75%, followed by Connecticut and Arkansas, which were tied at 78%.