Profitability Plunges At The Nation'sCUs

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ALEXANDRIA, Va. - (05/26/06) -- Profitability at America's creditunions declined again in the first quarter, for the third quarterin a row, to just 0.81% return-on-average assets, the lowest inmore than a decade, as the flattening yield curve continued tosqueeze profits. That compares to an ROA of 0.85% for the fourthquarter in 2005, 0.92% for the third quarter, and 0.93% for thethird and second quarters. Data compiled by NCUA shows that loangrowth for the first quarter was a tepid 0.9%, while share growthwas strong at 3%. Asset quality remained strong, with the loandelinquency ratio declining to just 0.59%, from 0.73% at year-end2005; and the charge-off ratio falling to a low 0.49%. Real estatelending continued to lead the way for loan growth, with firstmortgages increasing by 2.2% and other mortgages, which includessecond mortgages and home equity loans, rising by 2.7%. New autoloans grew by 0.9% in the first quarter, while used auto loansdeclined by 0.4%.

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