ALEXANDRIA, Va. – NCUA reported this afternoon its $2 billion third quarter assessment for the corporate credit union resolution erased almost half of the industry’s net income for the period, resulting in a third-quarter net of $1 billion, down from $1.9 billion for the second quarter.
The new NCUA report on third quarter finanials for 7,179 federally insured credit unions comes just two weeks after the FDIC reported that banks had their best quarter since before the financial meltdown of 2008, with a 45% increase in net income.
The corporate charge lowered expectations for a strong rebound from the past two years of financial slowdown, cutting the key profitability indicator, return on assets, from 77 basis points at mid-year, to just 66 bps at the end of the third quarter.
Still, net income for all credit unions for the first nine months of 2011 was $4.61 billion, more than the industry's net for all of 2010. Absent the $2 billion NCUA assessment credit unions would be well on their way to a record year.
Loan and share growth was tepid in the third quarter, with loans growing just 0.55% for the three months, and shares by 0.86%.
Membership growth, however, was strong, with an estimated 450,000 new members added to the rolls of federally insured credit unions.
“In the third quarter, credit union financials continued to move in the right direction. Membership, assets, and net worth all rose,” said NCUA Chairman Debbie Matz.
The loan delinquency and charge-off ratios remained about the same as at mid-year, with a delinquency ratio of 1.59% and a charge-off rate of 0.91% at the end of the third quarter.
