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Published On: July 10, 20182 min read

FMS Article: Credit Unions — Quarter 1 Analysis


The following article can be found on the blog page of the FMS website.

 

By Mark Loehrke, Editor, Financial Managers Society

Credit Union Quarter 1 Analysis

The nation’s federally insured credit unions kicked off 2018 with a bang, as the NCUA’s recently released data for the three months ended March 31 once again revealed a number of ongoing positive trends:

The Big Numbers

Net income was the eye-popper of the first quarter report, vaulting 2017’s first quarter number by 35.4% to a total of $12.6 billion. Both total assets ($1.42 trillion) and deposits ($1.13 trillion) also enjoyed respectable jumps over the same period last year, with increases of 5.9% and 5.5%, respectively. Meanwhile, total credit union membership moved up to 112.7 million in the first quarter – an annual gain of 4.7 million members.

Lending Strength

Total loans outstanding once again grew from a year earlier, rising 9.9% to a total of $972 billion. Leading the lending charge were several familiar categories, with notable year-over-year gains in both new auto loans (12.2%) and used auto loans (10.2%). Elsewhere on the asset side of the balance sheet, credit card balances rose 10%, and non-federally guaranteed student loans rose climbed by 13.9%. Delinquency rates across most loan categories dipped slightly compared to the first quarter of 2017.

Rising Expenses and ALLL

Interest expense totaled $8.4 billion annualized in the first quarter of 2018, up 23.3% from one year earlier, while non-interest expenses grew by 7.7% and labor expenses were up 7.2%. Across the credit union system, the average provision for loan and lease losses rose 17.8% to $6.7 billion at an annual rate in the first quarter of 2018.

Big Get Bigger

While the overall number of credit unions continued to decrease in the first quarter, the $1 billion+ and $500m-1b asset groups both added institutions, and also outperformed their smaller peers in terms of loan growth, net worth and membership gains.

 

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