NCUA Releases Q2 Financials

The National Credit Union Administration reported that deposit (share) growth slowed for federally-insured credit unions in the second quarter of 2010, while net worth remained steady.

Loan to Share Ratio Drops 34 Basis Points

Share (deposit) growth slowed to 0.6 percent during the second quarter, after growing at an annual rate of almost 11 percent in the first quarter of 2010.

Loans growth was virtually flat, edging up 0.1 percent to $566.4 billion during the second quarter. Balances on credit card loans, other unsecured loans, used vehicle loans, and first mortgage loans grew during the second quarter, while new vehicle loans and leases fell.

Because deposit growth was 6 times larger than loan growth during the quarter, the industry's loan to share ratio dropped 34 basis points to 72.82 percent.

For the first time, the industry's assets surpassed $900 billion -- reaching almost $904 billion.

The aggregate net worth ratio for the credit union industry held steady at 9.9 percent and more than 95 percent of federally insured credit unions still exceed the statutory requirement of being well capitalized.

ROA of 0.41 Percent

Credit unions reported second quarter net income of $782 million, yielding a year-to-date (YTD) profit of $1.83 billion. The aggregate YTD return on assets for federally-insured credit unions was 0.41 percent as of the end of the June -- 6 basis points beneath its March 2010 level.

Net interest income was up 26 percent from a year earlier to $10.9 billion. Lower interest expenses coupled with lower provisions for loan and lease losses more than offset the decline in interest income.

Non-interest income was less than $5.6 billion, while non-interest expenses grew by 2 percent over the last year to $13.65 billion at the end of the second quarter.

Two Consecutive Quarters of Lower Charge-off and Delinquency Rates

As of June, NCUA reported that 1.73 percent of credit union loans were 60 days or more past due – down 10 basis points from December 2009 and 3 basis points from March 2010. Participation loans and business loans are reporting the highest level of delinquent loans at 4.14 percent and 4.07 percent, respectively.

The net charge-off rate fell for the second consecutive quarter to 1.16 percent as of June 30, 2010.

Credit unions reported holding $1.65 billion in foreclosed and repossessed assets. Foreclosed real estate loans account for 85 percent of all foreclosed and repossessed assets.