NCUA Releases Q3 2017 Credit Union System Performance Data

ALEXANDRIA, Va. (Dec. 13, 2017) – Data on the financial performance of federally insured credit unions in the quarter ending September 30, 2017, are now available from the National Credit Union Administration.

NCUA makes detailed credit union system performance data available on its Credit Union and Call Report Data webpage, including Call Report quarterly summaries and financial performance reports. The agency’s Industry Data page includes a Financial Trends in Federally Insured Credit Unions package illustrating industry trends.

The NCUA has made changes to the quarterly data report to reflect changes in the information collected from credit unions as a result of the agency’s modernization of its member-business lending rule in 2016.

Selected Performance Indicators

• Total assets in federally insured credit unions rose by $86 billion, or 6.8 percent, over the year ending in the third quarter of 2017, to $1.36 trillion.
• Total loans outstanding increased $90 billion, or 10.6 percent, over the year to $937.0 billion. The average outstanding loan balance in the third quarter of 2017 was $14,708, up $561, or 4.0 percent, from one year earlier.
• The delinquency rate at federally insured credit unions was 79 basis points in the third quarter of 2017, little changed from one year earlier. The net charge-off ratio was 56 basis points, up from 53 basis points in the third quarter of 2016.
• Insured shares and deposits rose $65 billion, or 6.4 percent, over the four quarters ending in the third quarter of 2017 to $1.08 trillion.
• The loan-to-share ratio stood at 81.4 percent in the third quarter of 2017, up from 78.6 percent in the third quarter of 2016.
• The credit union system’s net worth ratio was 10.89 percent in the third quarter of 2017, compared with 10.85 percent one year earlier.
• Net income totaled $10.5 billion at an annual rate in the third quarter of 2017, up $0.76 billion, or 7.8 percent, from the same period a year ago.
• The net interest margin for federally insured credit unions was $39.5 billion in the third quarter of 2017, or 3.0 percent of average assets. That compares with $35.8 billion, or 2.9 percent of average assets, in the third quarter of 2016.
• The return on average assets for federally insured credit unions was 79 basis points over the year ending in the third quarter of 2017, up slightly from 78 basis points in the third quarter of 2016. The median return on average assets across all federally insured credit unions was 39 basis points, up 2 basis points from the third quarter of 2016.
• The number of federally insured credit unions declined to 5,642 in the third quarter of 2017 from 5,844 in the third quarter of 2016. In the third quarter of 2017, there were 3,536 federal credit unions and 2,106 federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-running industry consolidation trends.
• The number of credit unions with a low-income designation rose to 2,538 in the third quarter of 2017 from 2,459 one year earlier.
• Federally insured credit unions added 4.3 million members over the year, and credit union membership in these institutions reached 110.5 million in the third quarter of 2017.

Balance Sheet Details

Assets

• Total assets in federally insured credit unions rose by $86 billion, or 6.8 percent, over the year to $1.36 trillion in the third quarter of 2017.
• Cash and equivalents (assets with maturity of three months or less) fell $9.3 billion, or 8.5 percent, to $100.1 billion.
• Total investments (instruments with maturities in excess of three months) increased $1.2 billion, or 0.4 percent, to $267.5 billion.
  • Investments with maturities of less than one year rose $1.3 billion, or 1.7 percent, to $76.3 billion.
  • Investments with maturities of one to three years declined $12.1 billion, or 12.0 percent, to $88.6 billion.
  • Investments with maturities of three to five years increased $6.7 billion, or 10.8 percent, to $68.7 billion.
  • Investments with maturities of five to 10 years were up $4.5 billion, or 17.9 percent, to $29.5 billion.
  • Investments with maturities greater than 10 years rose $0.8 billion, or 22.0 percent, to $4.4 billion.
• Total loans outstanding increased $90 billion, or 10.6 percent, over the year to $937.0 billion. Credit union loan balances rose over the year in every major category, compared with the third quarter of 2016.
  • Real estate loans rose $41.5 billion, or 9.9 percent, over the year to $462.5 billion in the third quarter of 2017.
  • Auto loans increased $36.0 billion, or 12.4 percent, to $326.3 billion. Used auto loans rose $20.0 billion, or 11.2 percent, to $198.0 billion. New auto loans rose $16.0 billion, or 14.3 percent, to $128.2 billion.
  • Credit card balances rose $4.5 billion, or 9.0 percent, to $54.7 billion
  • Non-federally guaranteed student loans rose $0.5 billion, or 13.6 percent, to $4.3 billion.
  • The Call Report for the quarter ending on Sept. 30, 2017, was redesigned to reflect the new rule on member business loans. As a result, net member business loan balances, including unfunded commitments, are not available after the second quarter of 2017. Commercial loans, including unfunded commitments, totaled $66.5 billion in the third quarter of 2017; data are unavailable for prior quarters. Commercial loans are not directly comparable to member business loans.
• The delinquency rate at federally insured credit unions was 79 basis points in the third quarter of 2017, up from 77 basis points one year earlier. Loan performance was mixed across categories:
  • The delinquency rate on fixed real estate loans was 48 basis points in the third quarter, down from 54 basis points one year earlier.
  • The credit card delinquency rate was 123 basis points, up from 105 basis points in the third quarter of 2016.
  • For auto loans, the delinquency rate was 64 basis points in the third quarter of 2017 compared with 63 basis points one year earlier.
  • The delinquency rate for commercial loans, including unfunded commitments, was 187 basis points in the third quarter of 2017; data for prior quarters are not available.

The net charge-off ratio for all federally insured credit unions was 56 basis points in the third quarter of 2017, up from 53 basis points in the third quarter of 2016.

Liabilities and New Worth

• Credit union shares and deposits rose by $72.8 billion, or 6.8 percent, over the year to $1.15 trillion in the third quarter of 2017. Regular shares rose $32.0 billion, or 8.3 percent, to $419.8 billion. Other deposits increased $26.9 billion, or 5.0 percent, to $565.9 billion, led by money market accounts, which rose $14.4 billion, or 5.9 percent, and share certificate accounts, which were up $10.8 billion, or 5.5 percent.
• The credit union system’s net worth increased by $10.0 billion, or 7.2 percent, over the year to $148.6 billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.89 percent in the third quarter of 2017, up from 10.85 percent one year earlier.

Income Statement Details

• Net income for federally insured credit unions in the third quarter of 2017 totaled $10.5 billion at an annualized rate, up $0.8 billion, or 7.8 percent, from the third quarter of 2016. Interest income rose $4.6 billion, or 10.8 percent, over the year to $46.7 billion, and non-interest income increased $0.8 billion, or 4.4 percent, to $17.8 billion.
• Interest expense totaled $7.2 billion annualized in the third quarter of 2017, up $0.8 billion, or 13.2 percent, from one year earlier. Non-interest expenses grew $2.3 billion, or 6.0 percent, over the year to $40.7 billion in the third quarter. Rising labor expenses, which were up $1.3 billion, or 6.9 percent, accounted for more than half of the increase in non-interest expenses.
• The aggregate net interest margin widened $3.7 billion over the year, or 10.4 percent, to $39.5 billion at an annual rate in the third quarter of 2017.
• The credit union system’s provision for loan and lease losses rose $1.4 billion over the year, or 30.1 percent, to $6.2 billion at an annual rate in the third quarter of 2017.

Performance by Asset Category

Consistent with long-running trends, credit unions with assets of at least $1 billion reported the strongest growth in loans, membership, and net worth over the year ending in the third 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 federally insured credit unions with assets of at least $1 billion increased to 284 in the third quarter of 2017 from 268 in the third quarter of 2016. These 284 credit unions held $858.8 billion in assets, or 63 percent of total system assets. Credit unions in this

• category reported loan growth of 14.7 percent. Membership rose 9.2 percent. Net worth increased 11.4 percent.
• The number of federally insured credit unions with assets of at least $500 million but less than $1 billion increased to 246 in the third quarter of 2017 from 230 in the third quarter of 2016. These 246 credit unions held $173.0 billion in total assets, or 13 percent of total system assets. Credit unions in this category reported loan growth of 9.9 percent. Membership increased 4.9 percent. Net worth increased 7.8 percent.
• The number of federally insured credit unions with at least $100 million but less than $500 million in assets declined to 1,026 in the third quarter of 2017 from 1,054 in the third quarter of 2016. These 1,026 credit unions held $228.8 billion in total assets, or 17 percent of total system assets. Credit unions in this category reported loan growth of 0.4 percent. Membership declined 4.4 percent. Net worth fell 2.2 percent.
• The number of federally insured credit unions with at least $50 million but less than $100 million in assets increased to 724 in the third quarter of 2017 from 721 in the third quarter of 2016. These 724 credit unions held $51.8 billion in total assets, or 4 percent of total system assets. Credit unions in this category reported loan growth of 3.2 percent. Membership declined 1.2 percent. Net worth increased 0.9 percent.
• The number of federally insured credit unions with assets of at least $10 million but less than $50 million declined to 1,800 in the third quarter of 2017 from 1,880 in the third quarter of 2016. These credit unions held $44.8 billion in assets, or 3 percent of total system assets. Credit unions in this category reported a 1.9 percent decline in loans. Membership declined 6.3 percent. Net worth declined 3.6 percent.
• The number of federally insured credit unions with less than $10 million in assets declined to 1,562 in the third quarter of 2017 from 1,691 in the third quarter of 2016. These credit unions held $6.5 billion in assets, or less than 1.0 percent of total system assets. Credit unions in this category reported a 6.1 percent decline in loans. Membership fell 9.3 percent. Net worth declined 5.9 percent.