Monday, March 3, 2014

CU Profits Were $8.14 Billion for 2013

The National Credit Union Administration (NCUA) reported that credit unions reported a profit of $8.14 billion for 2013, down from $8.461 billion for 2012. Credit union return on average assets fell by 7 basis points from a year ago to 78 basis points. NCUA attributed much of the year-over-year decline to downward pressure on net interest margins, which were down 12 basis points.

Loans posted their 11th quarterly increase, rising to $645.2 billion -- up 8.0 percent compared to the end of 2012. Deposits (shares) at credit unions rose to $910 billion at the end of 2013, compared to $878 billion at the end of 2012. As a result, the loan to deposit ratio rose to 70.9 percent, the highest level since the end of 2010.

NCUA noted that the credit union industry's net worth ratio reached 10.78 percent -- its highest level since first quarter of 2009. NCUA reported that 97 percent of credit unions were well-capitalized with a net worth ratio at or above the statutorily required 7.0 percent.

Delinquency and net charge-off rates were largely unchanged between the third and fourth quarter 2013; but down from the end of 2012.

However, NCUA Chairman Matz expressed concern about the continued growth in long-term investments at credit unions. Chairman Matz noted that "[t]he growth in 5-to-10 year investments of nearly 60 percent is cause for concern."

NCUA wrote that the "[e]xposure to long-term assets has tripled since year-end 2007. During 2013, investments greater than 3 years increased by 32.6 percent, rising to $118.4 billion, an all-time high. Long-term investments as a share of assets stood at 11.8 percent, up from 9.4 percent at the end of 2012 and up from 3.4 percent at the end of 2009."

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