Interest income rose by 11.5 percent over the year to $47.5 billion and non-interest income increased by 4.2 percent to $18.1 billion.
Interest expense totaled $7.6 billion for 2017, up 15.0 percent from one year earlier. Non-interest expenses grew by 6.3 percent over the year to $41.2 billion in the fourth quarter. Rising labor expenses, which were up $1.4 billion, accounted for more than half of the increase in non-interest expenses.
Provision for loan and lease losses rose $1.3 billion over the year, or 25.9 percent, to $6.4 billion at the end of 2017.
The return on average assets for federally insured credit unions was 78 basis points over the year ending in the fourth quarter of 2017, up slightly from 76 basis points in the fourth quarter of 2016. Higher net interest margins,
The median return on average assets across all federally insured credit unions was 38 basis points, up 4 basis points from the fourth quarter of 2016.
Higher net interest margin and lower operating expenses as a percent of average asset positively affected return on average assets. However, lower fee and other income and non-operating income and higher provision for loan and lease losses negatively impacted return on average assets.
Loans, deposits, and assets were up at federally insured credit unions in 2017.
Total assets rose by 6.7 percent over the year to $1.38 trillion in the fourth quarter of 2017.
Total loans outstanding increased $88 billion over the year to $957.3 billion. Credit union loan balances rose over the year in every major category, compared to the end of 2016. At the end of 2017, over 20 percent of all credit union loans were indirect loans.
Shares and deposits rose by 6.1 percent during the year to $1.16 trillion.
Because loans were growing at a faster rate than shares, the loan to share ratio increased from 79.55 percent at the end of 2016 to 82.56 percent at the end of 2017.
Delinquencies and net charge-offs increased in 2017.
Delinquent loans increased by 7.5 percent in 2017 to almost $7.8 billion. The delinquency rate at federally insured credit unions was 81 basis points in the fourth quarter of 2017, down from 83 basis points one year earlier.
Net charge-offs at federally insured credit unions rose by $19.1 percent in 2017 to $5.4 billion. The net charge-off ratio for all federally insured credit unions was 60 basis points in the fourth quarter of 2017, up from 55 basis points in the fourth quarter of 2016.
Net worth ratio increased for 2017.
The credit union system’s net worth increased by $10.3 billion, or 7.3 percent, over the year to $151.1 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.96 percent of assets in the fourth quarter of 2017, up 7 basis points from 10.89 percent one year earlier.
Secondary capital that counted as net worth increased by 22.55 percent during 2017 to almost $223.5 million.
At the end of 2017, 97.9 percent of federally insured credit unions had a net worth ratio of at least 7 percent -- the minimum requirement for being well-capitalized. Forty-one federally insured credit unions were undercapitalized at the end of 2017. In comparison, 37 federally insured credit unions were undercapitalized at the end of 2016.
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