CHARLOTTESVILLE, Va.-A decline in delinquent loans is providing some help for the "Texas ratio," nonperforming assets divided by the sum of total equity and loan loss reserves, at credit unions.
Analysis released by SNL Financial found that the median Texas ratio for all CUs in the United States fell to 4.19% March 31, from 4.89% Dec. 31, 2012. The 70-basis-point fall over the three-month period was helped by delinquent loans also improving to 0.91% of total loans, down 15 basis points from year-end 2012, SNL reported.
Median ROAA slipped for the industry, though, falling three BPs to 0.27% from 0.30% a quarter earlier, according to SNL.
"In aggregate, credit unions have seen steady improvement in their collective Texas ratio over the last three years, falling to 6.54% at March 31, from 12.01% in Q1 2010," said SNL Financial in a statement. "Over that time frame, aggregate nonperforming assets fell by 34.82% while total equity rose by 22.94%.
SNL Financial said it found 26 operating credit unions posted a Texas ratio value above 100% at the end of the first quarter. Perhaps fittingly, the credit union with the highest Texas ratio is Richardson-based Texans Credit Union's 618.04%, though it did improve that ratio by 208.46 percentage points from the end of 2012. NCUA placed the Texans CU in conservatorship in April 2011 and continues to operate it, including injecting $60 million in capital. Texans reported positive net income of $24.17 million in 2012, after posting four consecutive years of losses totaling $223.2 million.
Behind Texans with the second-highest Texas ratio as of March 31 was Stevenson FCU in Stevenson, Ala. at 432.92% (but it has since been merged into Family Security CU in Decatur, Ala.). White Plains, N.Y.-based Union Baptist Greenburgh FCU had the highest percentage of delinquent loans to total loans among the group at 42.35% and the highest net charge-offs as a percentage of average loans at 58.95%.
