Federally Insured CUs Report Loan, Share, and Delinquency Increases
ALEXANDRIA, Va. -- The nation's 8,100 federally insured credit unions reported solid loan and share growth along with an increase in loan delinquencies and membership expansion for 2007.
With membership growth to 86,837,478 during 2007 loan growth was at 6.6% and share growth was 5.2%. Investments expanded 4.9% following several years of decline, with credit unions primarily investing in the corporate credit union system. "I am pleased to note that call report results indicate that cornerstone of credit union stability, net worth remains high at 11.44%," said NCUA Chairman JoAnn Johnson. "Real estate loans increased 11.0% to $271.1 billion in 2007 illustrating credit unions are actively engaged in serving their members' mortgage lending needs.
Meanwhile, real estate loans delinquent two months or more grew from .34% to .67%. Foreclosed real estate increased 102.2% to $331.9 million, and although a marked increase, foreclosures continue to represent .12% of total real estate loans. Credit card delinquencies were a reported 1.33% of total credit card loans at year-end 2007. The total loan delinquency ratio for federally insured credit unions increased from .68 to .93% during 2007.
"Reflecting widespread volatility in the mortgage market, which has migrated to many segments of the economy, credit unions are seeing increased delinquencies in various areas of lending and in foreclosures," Johnson observed. "Not withstanding, it is important to note that the delinquency increases, though material, do not threaten the overall safety, soundness and stability of the credit union industry."
"While these statistics pinpoint the changes credit unions are currently undergoing in the face of instability in the economic sector, I am confident that, on the whole, credit unions continue to perform well, and I encourage credit unions to stay the course and remain vigilant stewards offering a safe, sound place for their members to save and borrow and meeting their financial service needs," Johnson said.
Major loan categories grew in 2007, with the exception of a slight 1.8% decline in new automobile loans, which ended the year at $86.9 billion. While other types of real estate loans grew 8.7% to 91.7 billion, first mortgage real estate loans grew 12.3% to 179.4 billion. Used automobile loans grew 1.7% to 89.1 billion, and unsecured credit card loans grew 13.4% to $30.1 billion.
Documenting the move to fixed rate loans in 2007, fixed rate first mortgage loans increased 14.%, balloon/hybrid first mortgage loans increased 13.2%, and adjustable rate first mortgage loans increased 3.9%.
Share certificate accounts grew 14.4% to $216.1 billion, while money market share accounts grew 10.7% to $111.2 billion, and IRA and KEOGH accounts increased 9.3% to $56.9 billion. Share drafts grew 1.9% to $71.6 billion and regular share accounts decline to 7.0% to 168.4 billion.
Loan-to-share ratio increased to 83.3% and the year ended with a net worth ratio at federally insured credit unions of 11.44%. With net loan charge-offs of $2.6 billion, the net charge-off ratio was .50%, and the return-on-average-assets declined to .65.
Details of year-end 2007 data are available in a balance-sheet format and a December 2007 Facts/Summary statement at http://www.ncua.gov/data/FOIA/foia.html.