The National Credit Union Administration (NCUA) is reporting that credit unions posted solid growth over the last year.
Total assets grew $42.6 billion, or 4.0 percent, from the first quarter of 2013, reaching $1.1 trillion.
Share and deposit accounts rose 3.6 percent over the year to $943.1 billion, compared to $910 billion at the end of the first quarter of 2013.
In the first quarter of 2014, outstanding loan balances were up 8.8 percent from the first quarter of 2013 to $652.7 billion. The increase in loans was broad-based. Year-over-year, new auto loans were up 13.9 percent; used auto loans grew 11.3 percent; member business loans rose 11.1 percent.
However, higher interest rates slowed the pace of mortgage origination during the first quarter. Credit unions originated an annualized $42.6 billion in fixed-rate, first real estate loans in the first quarter, down from $102.9 billion in the first quarter of 2013.
The growth in total loans contributed to a 3.3 percentage point rise in the overall loans-to-shares ratio relative to a year ago, to 69.2 percent, the highest first-quarter ratio since 2010.
However, NCUA expressed concern about credit unions adding long-term investments to their portfolios. Investments with maturities of three years or less fell $22 billion, while investments with maturities greater than three years grew $20.5 billion. The net long-term asset ratio was 35.49 percent at the end of the first quarter of 2014.
Credit unions reported net income of $2.1 billion for the first three months of 2014. Interest income was up $226 million from a year ago to almost $9 billion. Total interest expenses fell by 9 percent over the year to slightly more than $1.43 billion. But non-interest income fell by roughly $234 million year-over-year to almost $3.4 billion.
The return on average assets was 78 basis points at the end of the first quarter, which was equal to the 2013 year-end figure and down 5 basis points from a year earlier.
The aggregate net worth ratio fell 16 basis points from the end of 2013 to 10.61 percent at the end of the first quarter, but was 31 basis points higher than the end of the first quarter of 2013. Ninety-six percent of federally insured credit unions were well-capitalized with a net worth ratio at or above the statutorily required 7.0 percent.
Asset quality continued to improve as both net charge-offs and delinquencies fell. The delinquency rate on credit union loans was 0.81 percent as of March 31, 2014. Net charge-off rate was 0.50 percent for the first quarter of 2014.
NCUA noted a bifurcation in the credit union industry performance. Large credit unions continue to prosper, while small credit unions are struggling financially. Small credit unions with less than $10 million in assets reported a decline in loan, net worth, and membership growth during the first quarter of 2014.
Read the press release.
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