NCUA reported that the net income of federally-insured credit union through the first 3 quarters of 2011 surpassed total net income for the industry for all of 2010.
Credit unions reported earning $1 billion in the third quarter bringing year-to-date net income to $4.61 billion. Factors having a positive impact on credit union profits in the third quarter included lower provisioning for loan and lease losses, lower interest expenses, and higher non-interest income. Factors that negatively impacted credit union income during the quarter included premium assessment to the Corporate Credit Union Stabilization Fund and lower interest income.
The industry's annualized return on assets (ROA) ratio stood at 66 basis points at the end of the third quarter, down slightly from 77 basis points in the second quarter. However, if ROA was adjusted for the premium assessment to the Corporate Credit Union Stabilization Fund, the return on assets would have been 92 basis points at the end of the third quarter.
Credit unions added $1 billion to their net worth during the third quarter. As of September 30, 2011, credit unions reported $96.6 billion in net worth. The net worth ratio for the industry increased 1 basis point during the quarter to 10.15 percent.
Federally-insured credit unions saw both an increase in assets and members during the third quarter. Assets rose by $8.7 billion to $951.1 billion. Credit unions reported adding more than 450,000 members during the third quarter, growing to 91.4 million individuals. In all, membership has increased by almost 1 million during the first 9 months of 2011.
NCUA reported shares (deposits) rose by $7 billion to $819.2 billion and loans increased by $3.1 billion to $567.1 billion. This was the second consecutive quarterly increase in total loans. However, since shares rose more rapidly than loans, the loan to share ratio fell by 21 basis points to 69.23 percent.
New auto loans and other real estate loans continued to decline, while used vehicle loans, unsecured loans, and first mortgage real estate loans rose during the quarter.
Asset quality was virtually unchanged during the quarter as the delinquency rate rose by 1 basis point to 1.59 percent. Loans 60 days or more past due rose from $8.9 billion as of June 2011 to approximately $9 billion as of September 2011; however, delinquent loans were well below the $9.9 billion reported a year earlier.
The pace of net charge-offs slowed during the third quarter. Net charge-offs were $1.2 billion during the third quarter. This was 6 percent below the level of net charge-offs reported during the second quarter of 2011. As a result, the industry's net charge-off ratio fell by 4 basis points during the quarter to .91 percent of average loan balances as of September 30, 2011.
Read the press release.
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