Achieva Credit Union (Dunedin, FL) has launched a merger consulting service that would help larger credit unions buy smaller community banks.
The credit union service organization, Achieva Merger Services, hopes to make a profitable business out of telling credit unions of the merits behind buying smaller commercial banks, and urging banks to consider credit unions a rich new resource of potential buyers.
Services to be provided by Achieva Merger Services include identifying targets, due diligence, pricing analysis, merger applications, regulatory advice, acquisition accounting, and integration of operations and technologies.
Achieva CU purchased Calusa Bank in 2015 in a whole bank deal.
Read the story.
Thursday, June 8, 2017
Wednesday, June 7, 2017
Consumer Credit Growth at CUs Accelerated in April
The Federal Reserve's G.19 report stated that the growth of outstanding consumer credit at credit unions accelerated for the month of April.
Outstanding consumer credit at credit unions grew by $6.4 billion in April to $398.2 billion. In comparison, outstanding consumer credit in March expanded by $4.1 billion.
Both revolving and non-revolving credit expanded in April.
After contracting in March, outstanding revolving credit increased by almost $300 million to $52.4 billion.
Non-revolving credit in April increased by approximately $6 billion to $345.8 billion.
Read the G.19 report.
Outstanding consumer credit at credit unions grew by $6.4 billion in April to $398.2 billion. In comparison, outstanding consumer credit in March expanded by $4.1 billion.
Both revolving and non-revolving credit expanded in April.
After contracting in March, outstanding revolving credit increased by almost $300 million to $52.4 billion.
Non-revolving credit in April increased by approximately $6 billion to $345.8 billion.
Read the G.19 report.
Tuesday, June 6, 2017
Is the Chicago Taxi Industry on the Verge of Collapse?
USA Today is reporting that ride-sharing companies are pushing the Chicago taxi industry to the brink of extinction.
According to the story, approximately 42 percent of Chicago's taxi fleet was idle during the month of March 2017.
Average monthly income per active medallion fell from $5,276 in January 2014 to $3,206 this year. The number of monthly street hails of taxis has fallen by more than half over the same time period to about 1.1 million monthly riders.
Moreover, foreclosures are on the rise, as taxi medallion owners cannot generate sufficient income to service their loans. In 2015, there were 59 foreclosure notices or foreclosure lawsuits initiated against medallion owners. This increased to 266 in 2016. This year, there has been more than 350 foreclosure notice or foreclosure lawsuits filed against medallion owners.
This is not good news for credit unions that are holding Chicago taxi medallion loans.
Read the story.
According to the story, approximately 42 percent of Chicago's taxi fleet was idle during the month of March 2017.
Average monthly income per active medallion fell from $5,276 in January 2014 to $3,206 this year. The number of monthly street hails of taxis has fallen by more than half over the same time period to about 1.1 million monthly riders.
Moreover, foreclosures are on the rise, as taxi medallion owners cannot generate sufficient income to service their loans. In 2015, there were 59 foreclosure notices or foreclosure lawsuits initiated against medallion owners. This increased to 266 in 2016. This year, there has been more than 350 foreclosure notice or foreclosure lawsuits filed against medallion owners.
This is not good news for credit unions that are holding Chicago taxi medallion loans.
Read the story.
Monday, June 5, 2017
Assets, Loans, Deposits, Membership Up in Q1 2017
The National Credit Union Administration (NCUA) reported that assets, loans and shares (deposits) at federally insured credit unions expanded during the first quarter.
According to the NCUA, loans grew by 10.6 percent over the last year to to $884.6 billion. However, loan growth slowed during the first quarter of 2017 to an annualized rate of 7.12 percent. With the exception of credit card loans, all other major loan categories posted an increase during the first quarter.
Insured shares and deposits rose $78 billion, or 7.8 percent, over the four quarters ending in the first quarter of 2017 to $1.1 trillion. However, the pace of share growth accelerated during the first quarter of 2017 to 16.62 percent.
So, while the loan-to-share ratio of 77.73 percent was up from a year ago, it was down from the end of 2016.
Federally insured credit unions added 4.3 million members over the year, and credit union membership in these institutions reached 108.0 million in the first quarter of 2017.
Net Income Up Year-over-Year, But Return on Average Assets Down
Net income for federally-insured credit unions was $2.35 billion for the first quarter of 2017. In comparison, net income was almost $2.29 billion one year earlier.
The return on average assets (ROA) was 0.71 percent for the first quarter of 2017. This was down from 0.77 percent at the end of 2016 and 0.75 percent from a year earlier. The median return on average assets across all federally insured credit unions was 33 basis points, unchanged from the first quarter of 2016.
Higher net interest margins and lower operating expenses as a percent of average assets had a positive impact on the credit union industry's ROA, while lower non-interest income as a percent of average assets and higher provisions for loan loan losses as a percent of average assets had a negative impact on ROA.
Net interest margins as a percent of average assets was 2.89 percent at the end of the first quarter of 2017. This was an improvement of 1 basis point compared to the end of 2016 and 2 basis points compared to a year ago.
Non-interest income as a percent of average assets was 1.28 percent for the first quarter of 2017. This fell by 11 basis points compared to the end of 2016 and by approximately 3 basis points from a year ago.
Operating expenses as a percent of average assets fell 6 basis points during the quarter to 3.04 percent.
Net Worth Increases
Net worth increased during the first quarter of 2017. Net worth was $143.1 billion as of March 31, 2017. This was up from $140.8 billion at the end of 2016 and 133.8 billion at the end of the first quarter of 2016.
However, the net worth ratio fell 19 basis points during the first quarter to 10.70 percent. Compared to a year ago, the net worth ratio was down 8 basis points.
As of March 31, 2017, 97.75 percent of all federally-insured credit unions had a net worth ratio of at least 7 percent. Forty-one credit unions had net worth ratios below 6 percent.
Delinquency Rates Nearly Unchanged Over the Year, But Net Charge-Off Rate Was Higher
The NCUA reported that delinquent loans were $6.1 billion as of March 31, 2017. The percentage of loans 60 days or more past due was 0.69 percent. This is down 2 basis points and 14 basis points from a year ago and last quarter, respectively.
Net charge-offs rose from $1 billion as of March 2016 to $1.3 billion as of March 2017. the net charge-off rate rose from 0.52 percent to 0.58 percent over the same time period.
Large CUs Outperform Small CUs
Credit unions with assets greater than $1 billion reported the strongest growth in loans, membership and net worth over the year ending in the first quarter of 2017. Credit unions with less than $50 million in assets reported declines in loans, membership and net worth over the year.
The number of credit unions with $1 billion or more in assets increased rom 263 in the first quarter of 2016 to 278 in the first quarter of 2017. These 278 federally insured credit unions held 62 percent of total system assets. Loan growth was 14.7 percent over the year. Membership rose 9.8 percent. Net worth increased 11.3 percent.
Read the press release.
Financial Trends Chart Book.
According to the NCUA, loans grew by 10.6 percent over the last year to to $884.6 billion. However, loan growth slowed during the first quarter of 2017 to an annualized rate of 7.12 percent. With the exception of credit card loans, all other major loan categories posted an increase during the first quarter.
Insured shares and deposits rose $78 billion, or 7.8 percent, over the four quarters ending in the first quarter of 2017 to $1.1 trillion. However, the pace of share growth accelerated during the first quarter of 2017 to 16.62 percent.
So, while the loan-to-share ratio of 77.73 percent was up from a year ago, it was down from the end of 2016.
Federally insured credit unions added 4.3 million members over the year, and credit union membership in these institutions reached 108.0 million in the first quarter of 2017.
Net Income Up Year-over-Year, But Return on Average Assets Down
Net income for federally-insured credit unions was $2.35 billion for the first quarter of 2017. In comparison, net income was almost $2.29 billion one year earlier.
The return on average assets (ROA) was 0.71 percent for the first quarter of 2017. This was down from 0.77 percent at the end of 2016 and 0.75 percent from a year earlier. The median return on average assets across all federally insured credit unions was 33 basis points, unchanged from the first quarter of 2016.
Higher net interest margins and lower operating expenses as a percent of average assets had a positive impact on the credit union industry's ROA, while lower non-interest income as a percent of average assets and higher provisions for loan loan losses as a percent of average assets had a negative impact on ROA.
Net interest margins as a percent of average assets was 2.89 percent at the end of the first quarter of 2017. This was an improvement of 1 basis point compared to the end of 2016 and 2 basis points compared to a year ago.
Non-interest income as a percent of average assets was 1.28 percent for the first quarter of 2017. This fell by 11 basis points compared to the end of 2016 and by approximately 3 basis points from a year ago.
Operating expenses as a percent of average assets fell 6 basis points during the quarter to 3.04 percent.
Net Worth Increases
Net worth increased during the first quarter of 2017. Net worth was $143.1 billion as of March 31, 2017. This was up from $140.8 billion at the end of 2016 and 133.8 billion at the end of the first quarter of 2016.
However, the net worth ratio fell 19 basis points during the first quarter to 10.70 percent. Compared to a year ago, the net worth ratio was down 8 basis points.
As of March 31, 2017, 97.75 percent of all federally-insured credit unions had a net worth ratio of at least 7 percent. Forty-one credit unions had net worth ratios below 6 percent.
Delinquency Rates Nearly Unchanged Over the Year, But Net Charge-Off Rate Was Higher
The NCUA reported that delinquent loans were $6.1 billion as of March 31, 2017. The percentage of loans 60 days or more past due was 0.69 percent. This is down 2 basis points and 14 basis points from a year ago and last quarter, respectively.
Net charge-offs rose from $1 billion as of March 2016 to $1.3 billion as of March 2017. the net charge-off rate rose from 0.52 percent to 0.58 percent over the same time period.
Large CUs Outperform Small CUs
Credit unions with assets greater than $1 billion reported the strongest growth in loans, membership and net worth over the year ending in the first quarter of 2017. Credit unions with less than $50 million in assets reported declines in loans, membership and net worth over the year.
The number of credit unions with $1 billion or more in assets increased rom 263 in the first quarter of 2016 to 278 in the first quarter of 2017. These 278 federally insured credit unions held 62 percent of total system assets. Loan growth was 14.7 percent over the year. Membership rose 9.8 percent. Net worth increased 11.3 percent.
Read the press release.
Financial Trends Chart Book.
Friday, June 2, 2017
Central One FCU Buys Naming Rights to High School Stadium
Central One Federal Credit Union (Shrewsbury, MA) will make a one-time sponsorship payment of $750,000 towards the Shrewsbury High School synthetic turf field project.
In return for the sponsorship, the Shrewsbury Public Schools School Committee unanimously voted to name the stadium after the credit union.
The stadium will be named Central One Federal Credit Union Stadium.
Read the Memorandum of Understanding.
Read the Minutes.
In return for the sponsorship, the Shrewsbury Public Schools School Committee unanimously voted to name the stadium after the credit union.
The stadium will be named Central One Federal Credit Union Stadium.
Read the Memorandum of Understanding.
Read the Minutes.
Thursday, June 1, 2017
IBM Southeast Employees' CU Completes Acquisition of Mackinac Savings Bank
IBM Southeast Employees' Credit Union (Delray Beach, FL) announced the merger and acquisition of Mackinac Savings Bank, in Boynton Beach, Florida.
The $109 million Mackinac Savings Bank has offices in Palm Beach County, Florida and lending offices in Florida, Massachusetts and Michigan.
IBM Southeast Employees Credit Union has $980 million in assets and 16 branches in Georgia and Florida.
Read the press release.
The $109 million Mackinac Savings Bank has offices in Palm Beach County, Florida and lending offices in Florida, Massachusetts and Michigan.
IBM Southeast Employees Credit Union has $980 million in assets and 16 branches in Georgia and Florida.
Read the press release.
Interagency Advisory Addresses Appraiser Shortage, Especially in Rural Areas
Responding to concerns over the limited availability of state-certified and -licensed appraisers, particularly in rural areas, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued an advisory that highlights two options to help insured depository institutions and bank holding companies facilitate the timely consideration of loan applications.
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires appraisals for federally related transactions to be performed by individuals who meet certain state-certification or -licensing requirements.
The two options to address the shortage of appraisers are temporary practice permits or temporary waivers.
Temporary practice permits allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law.
Temporary waivers set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.
Read the interagency advisory.
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires appraisals for federally related transactions to be performed by individuals who meet certain state-certification or -licensing requirements.
The two options to address the shortage of appraisers are temporary practice permits or temporary waivers.
Temporary practice permits allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law.
Temporary waivers set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.
Read the interagency advisory.
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