The State of Privately Insured Credit Unions

As of June 30, 2009, there were 156 privately insured credit unions, representing about 2 percent of all credit unions in the country.

Nine states currently permit state chartered credit unions to be privately insured; but most privately insured credit unions are located in 5 states. Ohio had the most privately insured credit unions with 63 as of June 2009; followed by Illinois with 29, Idaho with 18, Indiana with 17, and California with 15.

However, the bulk of the assets in privately insured credit unions were concentrated in five states:
• 25.6 percent, California;
• 20.4 percent, Nevada;
• 20 percent, Illinois;
• 15.7 percent, Ohio; and
• 12.3 percent, Indiana.

Assets, Shares and Loans Increase

Assets, shares (deposits), and loans at privately insured credit unions grew over the last year. As of June 2009, privately insured credit unions held slightly more than $12.2 billion in assets and $10.7 billion in shares and deposits. Total loans were $8.2 billion. Compared to a year ago,

• Assets were up 3.8 percent;
• Shares and deposits grew by 4.8 percent; and
• Loans increased by 2 percent.

Thirty-two credit unions were larger than $100 million in assets with 9 exceeding $550 million. Sixty-one privately insured credit unions are smaller than $10 million in assets.

Privately Insured Credit Unions Lose $68.9 Million thru June

Privately insured credit unions reported a loss of $68.9 million through the first six months of 2009. In comparison, these same institutions reported a profit of $25.4 million for the same time period in 2008. The return on average assets for privately insured credit unions was -1.14 percent as of June 2009 compared to 0.44 percent one year earlier.

Approximately 47 percent of privately insured credit unions were unprofitable as of June 2009. Losses at unprofitable credit unions were $82.5 million through the first six months of the year.

Privately insured credit unions in California and Nevada have been particularly hard hit by the recession. Only one privately insured credit union in each state did not report a loss through the first six months of this year. California privately insured credit unions reported losses of almost $28.2 million. In Nevada, losses were $45.5 million.

Net Worth Falls, But Most Are Well Capitalized

The net worth of privately insured credit unions fell by 6.2 percent from a year ago to almost $1.275 billion. The average equity to asset ratio for privately insured credit unions was 10.35 percent, while the median equity capital ratio was 12.89 percent.

The vast majority of privately insured credit unions are well capitalized. Only 7 privately insured credit unions, if they were subjected to prompt corrective action, would not meet the regulatory requirement of adequately capitalized.

Credit Quality Deteriorates

Asset quality fell over the last year at privately insured credit unions. Loans 60 days or more delinquent increased from $81.9 million as of June 2008 to $152.8 million a year later – an increase of 86.5 percent. An additional $127.8 million loans were in one month to two month delinquency bucket.

The percent of loans that were two or months delinquent stood at 1.87 percent at the end of the second quarter of 2009, up from 1.02 percent a year earlier.

Total charge-offs more than double from a year ago to almost $60.7 million. Foreclosed and repossessed assets were up almost 183 percent to $40.1 million.