ALEXANDRIA, Va. — Increasing loan losses in the third quarter forced credit unions to pump up reserves and left them barely in the black, the National Credit Union Administration reported Friday.
The industry's key profitability ratio, return on assets, eroded to 0.12%, the lowest level in decades.
The loan delinquency ratio rose 20 basis points from the second quarter, to 1.13%, and the chargeoff ratio rose 24 basis points, to 0.75%.
"Credit unions' continued high level of net worth will help them weather today's turbulent economy; however, credit unions are not immune to financial stress, as noted in the delinquency increase in categories such as credit cards and mortgage loans," said Michael Fryzel, the NCUA's chairman.
During the quarter loans made by credit unions increased 2.5%, while savings edged up 0.9%. This continued to strain liquidity, with the loan-to-share ratio rising to almost 84%.
The number of federally insured credit unions was 7,904 at the end of the third quarter, down from 7,972 at midyear.
