CU Growth Slowed In Second Quarter

ALEXANDRIA, Va. – Share growth among credit unions stagnated in the second quarter, growing by just 0.1%, while loans expanded a tepid 0.7%, NCUA reported this afternoon.Despite the sluggish loan growth, second quarter results represent a reversal of the three previous quarters of declining loan volumes.Still, return-on-assets, the industry’s key profitability indicator, increased to a strong 77 basis points, fueled by better cost controls and lower loan losses. The mid-year ROA is up slighly from the 74 bps for the first quarter, and the 51 bps for all of 2010.“The second quarter financials demonstrate the continued resilience of the credit union industry,” said NCUA Board Chairman Debbie Matz. “Specifically, I am pleased to see that net income has risen significantly since 2010, and that lending has grown for the first time in four quarters.Delinquencies remain near historically high levels, but they continue to trend downward. In the second quarter, credit unions reported a loan delinquency ratio of 1.58%, a 5 basis point improvement from the prior quarter. Similarly, the net charge-off ratio declined to 0.95% in the second quarter, a drop of 5 basis points from the end of March.Credit unions also reported 76,720 members filing bankruptcy in the second quarter, a 13% drop compared to first quarter filings. The percentage of loans charged off due to bankruptcy rose slightly to 24% through June 30, while the change in outstanding loans subject to bankruptcy dropped by 31% since the prior quarter-end.