NCUA Data Show CUs Still Facing Heavy Challenges
Net income and net worth increased at federally insured credit unions during the third quarter but overall lending was flat and the rate of member bankruptcies increased over last year, according to data released today by the NCUA.
From July through September, those credit unions had an 11.3% increase in net income, from $1.8 billion to $3 billion. Net worth rose from $89.3 billion to $90.6 billion, a 1.4% jump.
The delinquency ratio rose to 1.74% from 1.73% in the second quarter. Overall credit union lending was virtually unchanged-it rose 0.1%. Real estate loans rose 0.1%, used car loans rose only 1.8% and unsecured loans increased by 1.4%. New vehicle loans fell 3.6%.
The data also showed that the number of members filing for bankruptcy was 268,141 through the third quarter of 2010, compared to 246,386 over the same nine months of 2009. Member bankruptcies reached 323,737 at the end of 2009.
Foreclosed and repossessed assets grew 8.3% to $1.8 billion in the third quarter.
NCUA Chairman Debbie Matz tried to highlight the positive results, while acknowledging the difficulties.
"Positive trends are emerging," she said in a statement. Matz singled out a 0.45% increase in return on average assets, compared with a 0.40% rise during the second quarter of 2010.
She added while credit unions are making progress the agency is well aware of the "stressed financial environment'' facing many credit unions, and that is why the agency is increasing the size of its examination staff and making the examination process more rigorous.
The 2011 budget approved by the NCUA Board earlier this month includes funds to add 78 people to the examination staff, including 60 field staff.
For more information on the data, go to: http://www.ncua.gov/DataServices/FOIA/foia.aspx