Friday, August 31, 2012

CU Net Income Up 18.1 Percent from a Year Ago

NCUA reported that credit union earnings were up 18.1 percent to slightly more than $4.2 billion through the first two quarters of 2012.

During the second quarter, net income for federally-insured credit unions grew by 2.9 percent to almost $2.14 billion during the second quarter of 2012. NCUA stated that "increases in fee income and other operating income, accompanied by declines in expenses for interest and loan losses, produced a higher quarterly net income."

Compared to June 2011, provisions for loan and lease losses were down 23.2 percent to $1.825 billion a the end of the second quarter. Interest expenses were down 16.4 percent from a year ago, while non-interest income was up almost 15.9 percent.

The industry’s return on average assets ratio was 86 basis points for the second quarter -- up one basis point from the first quarter.

NCUA noted that the strong increase in earnings caused credit union net worth to increase by $2.1 billion during the quarter to $102.4 billion as of June 30, 2012. As a result, the industry's net worth ratio improved by 15 basis points to 10.16 percent during the quarter.

NCUA reported that outstanding loans expanded by 1.7 percent to $581.7 billion as of June 2012 from $572.0 billion as of March 2012. Total loans on the books of credit unions increased for the fifth consecutive quarter. All loan categories, except for one, posted an increase during the quarter.

During the second quarter, member business lending increased by 1.2 percent to $40.2 billion from $39.7 billion.

Investments held by federally insured credit unions increased by $6.9 billion during the second quarter to almost $282.7 billion.

In addition NCUA reported that total assets increased 0.6 percent to $1,007.6 billion from $1,001.8 billion during the quarter and deposits (shares) rose 0.3 percent to $868.8 billion from $866.0 billion.

The strong growth in loans relative to deposits caused the loan to share ratio to increase by 91 basis points to 66.96 percent during the quarter.

The industry saw a significant improvement is asset quality. Delinquent loans fell from almost $8.3 billion as of March 2012 to just below $7 billion as of June 2012. The delinquent loan ratio fell by 24 basis points to 1.20 percent. NCUA cited that the improvement was due to the agency's new rule regarding troubled debt restructurings.

Credit unions reported net charge-offs of $2.17 billion for the first two quarters of 2012. This is down almost 19 percent from June 2011 levels.

Read the press release.

1 comment:

  1. This comment has been removed by a blog administrator.



The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.