Credit Union Industry At-A-Glance (1Q18)

Credit unions added 4.7 million net new members in the past 12 months, and the NCUA’s equity distribution helped push ROA to 0.90%. What else happened in the first quarter?

 
 

Top-Level Takeaways

  • The NCUA’s equity distribution in March helped ROA reach 0.90%.
  • Strong loan growth pushed the industry loan-to-share ratio to 80.7%.
  • Credit unions have added 4.7 million net new members in the past 12 months.

The number of credit unions declined from 5,859 to 5,646 in the first quarter of 2018. As of March 31, there were 3,477 federally chartered credit unions and 2,169 state-chartered ones. The year-over-year decline of 213 credit unions is consistent with long-running consolidation trends. For example, the number of credit unions declined by 221 between the first quarters of 2016 and 2017.

Despite a drop in numbers, total assets increased $78.2 billion annually, or 5.8%, to end the first quarter at $1.4 trillion. Total loans at credit union increased $87.0 billion annually, or 9.7%, to $978.5 billion. Loan balances are positioned to surpass $1 trillion next quarter. The average outstanding loan balance as of the first quarter was $15,044. That’s up $534, or 3.7%, year-over-year.

 

 

On the liabilities side of the balance sheet, total credit union shares rose $64.9 billion annually to $1.2 trillion. That’s a 5.6% increase over the four quarters ending March 31, 2018. The average outstanding share balance was up $128, or 1.2%, year-over-year to $10,588.

INDUSTRY OVERVIEW

FOR U.S. CREDIT UNIONS | DATA AS OF 03.31.18
© Callahan & Associates | www.creditunions.com
  Data As Of 03.31.18 12-Month Growth (1Q18) 12-Month Growth (1Q17)
Assets $1.4T 5.8% 7.9%
Loans $982.5B 9.7% 10.7%
Shares $1.2T 5.6% 8.4%
Investments $379.6B -3.3% 3.0%
Capital $159.7B 6.9% 5.7%
Members 114.1M 4.3% 4.2%

Balance sheet growth for credit unions remains strong as 4.7 million net new members joined the movement.

Balance sheet dynamics underpinned an annual increase in the loan-to-share ratio, which stood at 80.7% as of March 31, 2018. This is up from 77.7% in the first quarter of 2017 and down from 82.5% in the fourth quarter of 2017.

The industry net worth ratio in the first quarter was 10.9%, up two-tenths of a percent from one year ago. Net income expanded 34.5% annually to $12.7 billion as of March 31. The bulk of this growth came from other operating income, which jumped 27.9% year-over-year as the NCUA distributed equity related to the Corporate System Resolution Program. Credit unions reported that equity distribution as other operating income on the 5300 Call Report.

Also showing strength, ROA at credit unions nationwide reached 90 basis points as of first quarter 2018. That's an annual increase of 19 basis points and is the industry’s highest ROA since Sept. 30, 2002. That high-water mark of 1.05% was primarily the result of NCUA insurance fund rebates hitting the income statement.

Finally, credit unions have added 4.7 million net new members over the past 12 months. The movement totaled 114.2 million members as of March 31, 2018, up 4.3% from one year ago. This marks six consecutive quarters of 4% annual membership growth.

Wait, There’s More!

This is just one section of the industry trends discussion that appears in Credit Union Strategy & Performance. Read the whole discussion today.

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