Credit Unions Fared Well in the Third Quarter

For the Top 10, the sharp rise from the second quarter to the third quarter came mainly from higher net interest income. A smaller rise in operating income was essentially canceled out by increases in employee expenses and expected credit losses.

Top 10 loan originations for the three months ending Sept. 30 were $33.4 billion in the third quarter, up 13% from a year earlier and up 4% from the second quarter. Originations by reported sectors included:

• 1st mortgage, which were $7.7 billion in the third quarter, up 13.5% from a year earlier and down 4% from the second quarter.
• Other residential loans, which were $3.2 billion in the third quarter, up 5.7% from a year earlier and up 4.5% from the second quarter.
• Consumer loans, which were $21.7 billion in the third quarter, up 14.4% from a year earlier and up 7.4% from the second quarter.
• Commercial loans, which were $680.3 million in the third quarter, up 1.4% from a year earlier and down 2.2% from the second quarter.

Loan quality measures were mixed. The Top 10’s 60-day-plus delinquency rate was 1.44% on Sept. 30, down from 1.48% a year earlier, but up from 1.35% on June 30. The net charge-off ratio was 1.44% for the three months ending Sept. 30, down from 1.52% a year earlier and 1.58% in the second quarter.

For the 4,286 credit unions in the Callahan tally on Monday, the net charge-off rate was 0.73% in the third quarter, down from 0.76% a year earlier and 0.75% in the second quarter.

For the 4,385 credit unions in the tally by Thursday, the delinquency rate was 0.95% on Sept. 30, up from 0.91% a year earlier and down from 0.90% on June 30.

On the balance sheet, the Top 10’s loan portfolio grew 5.7% from a year earlier and 1.7% from June 30.

First mortgages were up 6% from a year earlier and 1.7% from June 30.

Auto lending has been falling generally for credit unions. For the Top 10, their balances at June 30 were 0.2% less than a year earlier with new car loans down 2.5% and used loans up 1.4%

But auto lending showed a 0.3% gain from the previous quarter as new car loan balances fell 0.4%, while used car loans rose 0.7%.

The credit unions in the Top 10 were unchanged from the previous quarter, and all comparisons are to the same credit unions regardless of their prior rank.

The third quarter’s Top 10 credit unions, their net income and ROA were:

1. Navy FCU of Vienna, Va. ($194.2 billion in assets, 15 million members), which earned $544.5 million in the third quarter, or 1.16% ROA, up from 1.12% a year earlier and up from 0.94% in the second quarter.
2. State Employees’ CU of Raleigh, N.C. ($56.8 billion in assets, 3 million members), which earned $115.5 million in the third quarter, or 0.84% ROA, up from 0.43% a year earlier and down from 1% in the second quarter.
3. SchoolsFirst FCU of Santa Ana, Calif. ($34.4 billion in assets, 1.5 million members), which earned $85.1 million in the third quarter, or 1.03% ROA, up from 0.8% a year earlier and up from 0.66% in the second quarter.
4. PenFed CU of Tysons, Va. ($29.4 billion in assets, 2.7 million members), which earned $28.7 million in the third quarter, or 0.38% ROA, up from 0.15% a year earlier and up from 0.31% in the second quarter.
5. BECU CU of Tukwila, Wash., by Seattle ($28.9 billion in assets, 1.5 million members), which earned $23.7 million in the third quarter, or 0.33% ROA, down from 0.95% a year earlier and down from 0.64% in the second quarter.
6. America First FCU of Riverdale, Utah ($23.3 billion in assets, 1.5 million members), which earned $100.5 million in the third quarter, or 1.78% ROA, up from 1.32% a year earlier and up from 1.41% in the second quarter.
7. Mountain America FCU of Salt Lake City ($20.2 billion in assets, 1.3 million members), which earned $41.5 million in the third quarter, or 1.12% ROA, down from 1.38% a year earlier and up from 1.08% in the second quarter.
8. Golden 1 CU of Sacramento, Calif. ($21.1 billion in assets, 1.2 million members), which earned $31.5 million in the third quarter, or 0.62% ROA, up from 0.51% a year earlier and up from 0.54% in the second quarter.
9. Alliant CU of Chicago ($20.3 billion in assets, 941,349 members), which earned $30.6 million in the third quarter, or 0.61% ROA, down from 0.71% a year earlier and down from 0.84% in the second quarter.
10. Suncoast CU of Tampa, Fla. ($19.1 billion in assets, 1.4 million members), which earned $63.8 million in the third quarter, or 1.38% ROA, up from 1.21% a year earlier and up from 1.25% in the second quarter.