CU Loans, Deposits, and Assets Grew in 2015

The National Credit Union Administration (NCUA) reported that shares ((deposits), loans, and assets grew at federally insured credit unions in 2015.

Total shares and deposits at federally insured credit unions surpassed $1 trillion in the fourth quarter of 2015. Overall, share and deposit accounts at federally insured credit unions increased $65.2 billion, or 6.9 percent, from the end of the fourth quarter of 2014. According to NCUA, share drafts posted strong growth of 14.5 percent for the year.

Total loans at federally insured credit unions reached $787 billion in the fourth quarter of 2015, an increase of 2.3 percent from the previous quarter and 10.5 percent from a year earlier, as all major loan categories grew in 2015. Credit unions originated almost $406 billion in loans in 2015, up from $351 billion in 2014.

Outstanding indirect loans constitute 17.34 percent of total loans.

The loans-to-shares ratio at the end of the fourth quarter was 77.5 percent, unchanged from the previous quarter and up 2.5 percentage points from the end of the fourth quarter of 2014.

Total assets in federally insured credit unions rose to $1.2 trillion at the end of the fourth quarter of 2015, an increase of $82.2 billion, or 7.3 percent, from the end of 2014.

Credit Union Profitability Slipped During Fourth Quarter

Net income at federally insured credit unions was $8.7 billion for 2015 -- up 0.3 percent from a year ago.

Provisions for loan and lease losses were a drag on earnings in 2015. Provisions for loan and lease losses increased by almost 30 percent during 2015 to $4 billion at the end of 2015.

In addition, non-interest expenses increased by almost $2.3 billion in 2015 to $36.2 billion at the end of 2015.

However, higher interest and non-interest income positively affected credit union industry earnings.

Return on Average Assets was 0.75 percent at the end of 2015 -- down 5 basis points from the third quarter of 2015 and the end of 2014.

Overall, 79 percent of federally insured credit unions reported positive returns on average assets for 2015.

Net Worth Ratio Edged Lower

The credit union industry's net worth ratio was 10.92 percent at the end of 2015 -- down 7 basis points from the third quarter of 2015 and 4 basis points from the end of 2014.

The percentage of federally insured credit unions that were well-capitalized rose over the past four quarters with 97.9 percent reporting a net worth ratio at or above the statutorily required 7 percent. A year earlier, 97.6 percent of credit unions were well-capitalized. As of December 31, 2015, 0.6 percent of federally insured credit unions were undercapitalized.

Delinquent Loans Up for 3 Straight Quarters

At the end of the fourth quarter of 2015, delinquent loans were at $6.4 billion. This is the third consecutive quarterly increase in past due loans.

The delinquency rate at federally insured credit unions rose slightly in the fourth quarter to 81 basis points from 78 basis points the previous quarter, but remained below the 85 basis-point level in the fourth quarter of 2014.

As of the end of 2015, the coverage ratio (allowances for loan and lease losses to delinquent loans) was 114.66 percent at the end of 2015. In comparison, the coverage ratio was 114.96 percent one year ago.

In addition, loans 30 days thru 59 days past due grew by $2.35 billion in the last quarter of 2015 to almost $8.5 billion.

Net charge-offs were up from $3.36 billion at the end of 2014 to $3.63 billion at the end of 2015. Despite the increase in net charge-offs, the net charge-off rate over the same period fell from 0.50 percent to 0.48 percent. However, between the third quarter of 2015 and the fourth quarter of 2015, the net charge-off rate rose by 2 basis points.

Read the press release.