Top 10 Credit Union Earnings Flat, But Originations Grow

Employee and other overhead costs have been slowly rising. They were an annualized 2.86% of average assets in the second quarter, up 2 basis points from the first quarter and up 11 bps from a year earlier.

Net operating income, which replaces loan loss provisions with actual write-offs, showed a steady increase from a low of 0.44% in the fourth quarter to 0.88% in the second quarter, matching the level a year earlier.

The brightest trends were some healthy gains in originations. The group’s total loan originations were $32.1 billion in the three months ending June 30, up 11% from a year earlier and up 14% from the first quarter.

Here’s how the originations broke out:

• First mortgages were $8.0 billion, up 22% from a year earlier and up 41% from the first quarter. However, the MBA forecast a 28% 12-month gain for all lenders.
• Home equity lines of credit and other second liens were $3.1 billion, up 5% from a year earlier and up 14% from the first quarter.
• Commercial lending was $692.2 million, down 8% from a year earlier and up 19% from the first quarter.
• Consumer credit, which includes auto loans, personal loans, boat loans and credit cards, was $20.2 billion, up 8% from a year earlier and up 15% from the first quarter.

On the balance sheet, autos fell 0.2% from a year ago to $73.9 billion on June 30, continuing a pattern of decline that has been going on for more than a year. Credit cards, which account for 28% of consumer loans, and unsecured personal loans, which account for 12%, both rose 5.1%.

The big movement in consumer lending came from the "other secured loans" category, which constitutes 6% of consumer loans and includes boats and whatever else is not real estate but worth using as collateral. Other unsecured loans rose 17% to $10.3 billion.
Loan quality had a slight improvement.

The delinquency rate for the Top 10 was 1.35%, unchanged from 1.35% a year earlier and up from 1.20% three months earlier. March is typically a low point for delinquencies as consumers try to catch up with payments with tax refunds.

The net charge-off ratio was 1.58% for the second quarter, down from 1.69% a year earlier and down from 1.67% in the first quarter.
The Top 10 was the same lineup in the same order as the first quarter:

1. Navy Federal Credit Union, Vienna, Va. ($191.8 billion, 14.8 million members) had ROA of 0.91% in the second quarter, down from 1.26% a year earlier and 1.05% in the first quarter. Originations were $15.6 billion, up 2.9% from a year earlier and up 11.8% from the first quarter.
2. State Employees' Credit Union, Raleigh, N.C. ($56.2 billion, 2.9 million members) had ROA of 0.98% in the second quarter, up from 0.17% a year earlier and 0.33% in the first quarter. Originations were $2.5 billion, up 5.7% from a year earlier and down 3.6% from the first quarter.
3. SchoolsFirst Federal Credit Union, Santa Ana, Calif. ($34.1 billion, 1.5 million members) had ROA of 0.64% in the second quarter, up from 0.36% a year earlier and 0.55% in the first quarter. Originations were $2.2 billion, up 33.9% from a year earlier and up 26.2% from the first quarter.
4. PenFed Credit Union, Tysons, Va. ($30 billion, 2.8 million members) had ROA of 0.31% in the second quarter, up from 0.26% a year earlier and down from 0.77% in the first quarter. Originations were $1.5 billion, up 7% from a year earlier and up 54% from the first quarter.
5. BECU, Tukwila, Wash. ($28.9 billion, 1.5 million members) had ROA of 0.64% in the second quarter, down from 0.82% a year earlier and 0.69% in the first quarter. Originations were $1.7 billion, down 6.8% from a year earlier and up 20% from the first quarter.
6. America First Federal Credit Union, Riverdale, Utah ($22.9 billion, 1.5 million members) had ROA of 1.38% in the second quarter, down from 0.94% a year earlier and unchanged from the first quarter. Originations were $2 billion, up 29% from a year earlier and up 23% from the first quarter.
7. Mountain America Federal Credit Union, Salt Lake City ($21.5 billion, 1.4 million members) had ROA of 0.60% in the second quarter, down from 0.86% a year earlier and 0.94% in the first quarter. Originations were $1.8 billion, down 2.3% from a year earlier and down 1.2% from the first quarter.
8. Golden 1 Credit Union, Sacramento, Calif. ($20.6 billion, 1.2 million members) had ROA of 0.53% in the second quarter, unchanged from 0.53% a year earlier and down slightly from 0.56% in the first quarter. Originations were $1.6 billion, up 7.7% from a year earlier and up 8.5% from the first quarter.
9. Alliant Credit Union, Chicago ($20 billion, 924,926 members) had ROA of 0.84% in the second quarter, up from 0.55% a year earlier and 0.40% in the first quarter. Originations were $1.6 billion, up 80% from a year earlier and up 39% from the first quarter.
10. Suncoast Credit Union, Tampa, Fla. ($18.9 billion, 1.3 million members) had ROA of 1.22% in the second quarter, up from 0.61% a year earlier and 0.97% in the first quarter. Originations were $1.6 billion, up 102% from a year earlier and up 14% from the first quarter.