ALEXANDRIA, Va. – Another $14 billion of new deposits flowed into credit unions in the fourth quarter – making a total of $72 billion for the year, as the industry continued to benefit from savers’ flight to safety, according to year-end data released yesterday by NCUA.
Credit union shares grew by 2% for the fourth quarter and by 10.5% for the year – the most in more than a decade – as consumers continued to seek out the safety of federally insured deposits.
"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," said NCUA Chairman Debbie Matz in a statement. "However, these positive developments are tempered by recognition of ongoing market stresses." She was alluding to NCUA’s decision to boost its examinations staff.
But just as share growth surged, loan growth stagnated, falling into the negative for the fourth quarter and running at an anemic 1.1% for the full year.
In addition, membership declined in the fourth quarter by 400,000, even as shares grew strongly. For the year membership growth was less than 1.5%.
Loan delinquencies continued to rise in the fourth quarter to a 15-year high of 1.82%, prompting credit unions to continue to set aside billions in loss reserves. Delinquent loans grew at year end by 34% to a total of $10.4 billion.
For the full year credit unions increased their allowance for loan losses by 34%, after boosting it by 120% in 2008.
Net income and return on assets was impossible to determine because hundreds of millions of dollars charged by credit unions for the corporate bailout in 2008 was recaptured as one-time income after NCUA was authorized to stretch the corporate bailout for as long as seven years.
