The National Credit Union Administration
The trend of mergers and overall consolidations continued for the industry, as 272 federally insured CUs were either merged or ceased operations in the last year, amounting to a 4.4% decrease in the overall number of FICUs. In spite of this, credit unions added 1.2 million members during the 2nd quarter.
Although membership grew by 3.8% at federally insured credit unions overall, those with less than $10 million in total assets saw a 1.3% decline in membership.
Lending Grows, Delinquencies Creep Up
According to the regulator, credit unions saw significant growth year over year in all categories of lending; with outstanding loan balances totaling $823.4 billion, a 10.5% increase from the prior year. Additionally, new auto loans grew 15.6%, used auto loans grew 13.1% and total real estate lending grew 8.7%.
The loan-to-share ratio was up 2.3% to 77.8% from last year, although the ratio was a little higher for low-income credit unions who reported a loan-to-share ratio of 79.9%.
“American consumers are seeing the difference between credit unions and their competitors, and the choice is clear. Excellent member service and first-rate products and services continue to set credit unions apart and draw new members to the industry,” Berger said
Although loan numbers were on the rise, overall delinquency rates grew one basis point in the last year. The call report data showed increase delinquency rates in all categories except fixed real estate lending, where there was a 13 basis point drop since the prior year. Credit card delinquencies grew seven basis points to 93, non-federally guaranteed student loans grew 20 basis points to 119 and MBL delinquencies grew 47 basis points to 149.
“The system’s net charge-off ratio increased slightly to an annualized 51 basis points in the first half of 2016, up from 46 basis points in the first half of 2015,” NCUA said in a release.
Large CUs Seeing Most Growth
The NCUA reported CUs with assets of $500 million or greater had shown the greatest performance throughout the industry, “continuing a long-running trend.”
Currently, 494 credit unions with $917.1 billion in combined assets hold 73.1% of the total industry assets; 4,345 credit unions with less than $100 million in assets hold 8.4% of the total industry assets.
CUs with more than $500 million in assets reported an 8.6% net worth increase, 10.7% loan increase and 6.7% membership growth. As the total assets decrease, so do the gains. Credit unions holding between $100-500 million in assets saw a net worth increase of 6.1%, loan growth of 7.8% and a membership growth of 2.9%. CUs holding between $10-100 million in assets reported a 3.6% net worth increase, 4.4% loan portfolio growth, and 0.4% membership growth.
In the smallest asset category, CUs with less than $10 million in assets, the numbers were significantly less than their larger counterparts. The asset category reported a net worth growth of half a percent, loan growth of 0.6% and a decline in membership by 1.3%.
