US credit union sector shows sustained growth, says NCUA

Nationally, 85% of federally insured credit unions had positive net income during the first half of 2018

The US credit union has shown sustained growth in the second quarter, according to the latest review of the sector.

In its quarterly US map of of the sector, the National Credit Union Administration (NCUA) found that median loan growth in federally insured credit unions was 5.4%; median asset growth was 2.1 %; the median rate of growth in shares and deposits was 1.9%; and the median loans-to-shares ratio was 63%.

Nationally, 85% of federally insured credit unions had positive net income during the first half of 2018, compared to 80% during the first half of 2017.

At least 65% of credit unions in every state had positive net income during the first half of 2018, adds the NCUA.

The share of federally insured credit unions with positive net income was highest in Vermont and Nevada (both 100%) followed by Oregon (98%). The share was lowest in the District of Columbia (66%), followed by Louisiana (69%).

While overall membership in federally insured credit unions continued to grow during the year ending in the second quarter of 2018, at the median, membership was roughly unchanged, says the report.

Membership declined 0.1% at the median over the year ending in the second quarter of 2017. Overall, almost half of federally insured credit unions had fewer members at the end of the second quarter of 2018 than a year earlier.

Credit unions with falling membership tend to be small, says the NCUA; about 75% had less than $50m in assets.

Nationally, the median growth rate in loans outstanding was 5.4% over the year ending in the second quarter of 2018, compared to 4.4% the previous year. Median loan growth was positive in every state.

Median total delinquency rate among federally insured credit unions was 62 basis points, compared to 69 basis points in the second quarter of 2017, the report adds.

Across the country, the median ratio of total loans outstanding to total shares and deposits was 66% at the end of the second quarter of 2018. At the end of the second quarter of 2017, ratio was 63%.

Nationally, the median annualised return on average assets was 52 basis points during the first half of 2018, compared to 36 basis points during the first half of 2017.

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