Earnings Up, As CUs On The Rebound

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ALEXANDRIA, Va. – Credit unions across the country reported a strong fourth quarter, cutting operating expenses to boost return-on-assets, as the economic rebound appears at hand, according to NCUA.
ROA, the key profitability indicator, rose to 0.51% for the fourth quarter, up from 0.45% for the third quarter, and just 0.18% at year-end 2009. While operating expenses -- including stabilization expenses, cost of funds, and provision for loan loss expenses -- declined.
Still, there are some troubling signs, as both lending and membership declined in the fourth quarter, while share growth was very tepid, less than 1%. For the year, lending declined by more than 1.3%.
“Credit unions, as a whole, are exhibiting positive trends in their operations,” said NCUA Chairman Debbie Matz. “As the nation emerges from a prolonged economic contraction, the stabilization of many strategic indicators and evidence of improving economic trends demonstrate positive developments for credit unions.”
“Virtually every key ratio improved by year-end -- net worth climbed to 10.06 %; return on average assets grew 33 basis points after recovering from a decline in 2008 and showing slight improvement in 2009; and delinquencies, charge-offs, and cost of funds declined.”
Delinquencies remained at historically high levels, ending 2010 at 1.74%, and the charge-off ratio was 1.1%

Credit union member bankruptcies continue to increase also and were up by 3% over 2009 to a new high.ALEXANDRIA, Va. – Credit unions across the country reported a strong fourth quarter, cutting operating expenses to boost return-on-assets, as the economic rebound appears at hand, according to NCUA.

ROA, the key profitability indicator, rose to 0.51% for the fourth quarter, up from 0.45% for the third quarter, and just 0.18% at year-end 2009. While operating expenses -- including stabilization expenses, cost of funds, and provision for loan loss expenses -- declined.

Still, there are some troubling signs, as both lending and membership declined in the fourth quarter, while share growth was very tepid, less than 1%. For the year, lending declined by more than 1.3%.

“Credit unions, as a whole, are exhibiting positive trends in their operations,” said NCUA Chairman Debbie Matz. “As the nation emerges from a prolonged economic contraction, the stabilization of many strategic indicators and evidence of improving economic trends demonstrate positive developments for credit unions.”

“Virtually every key ratio improved by year-end -- net worth climbed to 10.06 %; return on average assets grew 33 basis points after recovering from a decline in 2008 and showing slight improvement in 2009; and delinquencies, charge-offs, and cost of funds declined.”

Delinquencies remained at historically high levels, ending 2010 at 1.74%, and the charge-off ratio was 1.1%

Credit union member bankruptcies continue to increase also and were up by 3% over 2009 to a new high.

 

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