Thursday, March 1, 2012

Credit Union Profits Soar by 41 Percent

The National Credit Union Administration (NCUA) reported today that profits at federally insured credit unions (FICUs) soared by more than 41 percent in 2011.

FICUs earned $6.4 billion in profits for 2011, even after paying almost $1.9 billion in Corporate Credit Union Stabilization Fund and NCUSIF premium expenses. In comparison, FICUs earned $4.5 billion for 2010. This caused the industry's return on assets (ROA) ratio to rise 18 basis points to 68 basis points at the end of 2011.

Factors having a positive influence on earnings included lower interest expenses, lower loan loss provisions, and higher non-interest income. Factors negatively impacting earnings included higher non-interest expenses and lower interest income.

Due to the strong earnings growth at FICUs, net worth at credit unions grew 6.9 percent reaching $98.4 billion and the net worth ratio climbed from 10.06 percent to 10.23 percent.

Strong Asset and Deposit Growth
Credit union total assets continued to rise, reaching $961.8 billion as of the end of the fourth quarter – up $47.4 billion for the year. Deposits (shares) increased 5.2 percent during the year to $827.4 billion from $786.4 billion.

On the other hand, total loans rose by 1.2 percent reaching $571.5 billion by year-end. Outstanding new vehicle loans fell by 7.3 percent in 2011, while used auto loan balances increased 5.1 percent. Outstanding credit card loans grew by almost 4 percent during 2011. Business lending rose to $39.1 billion as of the end of 2011, an increase of 5.2 percent for the year.

Since deposits grew faster than loans, the loan to deposit ratio for FICUs fell to 69.07 percent from 71.81 percent a year earlier. In addition, cash and short-term investments rose from 16.10 percent to 17.31 percent over the year.

During the fourth quarter, FICUs added 398,000 members and for the year, membership was up by 1.3 million individuals to 91.8 million members.

Delinquencies and Charge-offs Stable
At the end of 2011, credit unions reported $9.1 billion in delinquent loans. This resulted in a loan delinquency ratio of 1.60 percent for the fourth quarter -- a slight 1 basis point increase over the third quarter, but a drop of 16 basis points from a year earlier.

Net charge-offs at FICUs were $5.2 billion for 2011. As a result, the net charge-off ratio during the quarter stayed constant at 0.91 percent.

Read the press release.


  1. Thank you for making arguments as to why credit unions are the consumer's choice. I think Keith needs a little inward reflection time. It's ok to move your money Keith.

  2. Keith - your article is lacking a comparion to Banks and other for-profit financial intermediaries, which makes your article's title appear to be an attempt at mud slinging where there is no mud.

    An ROA of 68 basis points is BETTER but it's not lush enough to provide the executive perks many bank executives get.

    Gross dollars paid in dividends is a meaninless number, until you put it in relationship to another, like dollars on deposit or $ per account holder. Further more you need to contrast that with the equivalent bank account holder's measure.

    Also how do you account for the value of the millions of volunteer hours that are required to govern a credit union, vs. the directors fees paid to the hand selected Bank Board members who never, ever face a challenger?

    I'm just askin' for a complete analysis...

  3. to both anonymous above. id say "wow" but its so typical cu that no one, even cu's that know better, would be surprised any more.
    leggett wrote an update on cu's. basically reporting facts that are mostly good.
    somehow its taken by you two clowns as a "slight" to cu's. no wonder many cu's are distancing themselves from the "movement" and cuna.
    "millions" of "volunteer" hours? are you kidding?
    "millions" of member capital wasted on silly cu conference that what you are referring to?
    or, is it the millions, no billions of member caapital wasted on bailing out the ccu mess...and most of these "volunteers" have no CLUE how bad the situation is and that cu's have allowed themselves to be snookered by cuna and ncua about the ccu mess.
    or, are you referring to the hand selected boards at cu's that never, ever face a challenger?
    wake up.



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