Third-quarter data show that federally insured credit unions (FICUs) grew loans $235 billion (19.2%) to a total of $1.46 trillion, and shares and deposits $89 billion (5.6%) to $1.69 trillion, over the 12-month period ending Sept. 30, the National Credit Union Administration (NCUA) reported Thursday.
The industry’s loan-to-share ratio was 78.4% as of Sept. 30, up from 69.9% from a year earlier, the data shows. The agency said credit union loan balances rose in all major categories compared with the third quarter of 2021.
Return on average assets (ROAA) declined 24 basis points (bp) over the 12-month period, to 0.88%. The loan delinquency rate was 53bp in the third quarter of 2022, up 7bp compared with the third quarter of 2021.
Credit unions had total assets of $2.15 trillion as of Sept. 30, according to the data.
NCUA Chairman Todd Harper welcomed the overall positive results but struck a note of caution amid the current environment, noting that “with ongoing inflationary pressures and rising interest rates, a credit union’s ability to manage its interest rate and liquidity risk exposures will remain a crucial factor in its performance for the remainder of the year and into 2023. Credit unions of all types and sizes must remain diligent in managing their balance sheets, financial performance, and liquidity, interest rate, and credit risk levels as we navigate the challenging economic environment ahead of us.”
The NCUA noted the following highlights from the third-quarter data report:
- Net income for federally insured credit unions totaled $18.5 billion at an annual rate in the first three quarters of 2022, down $3.0 billion, or 14.1%, from the same period a year ago. Interest income rose $9.0 billion, or 15.3%, over the year to $67.4 billion. Non-interest income fell $3.4 billion, or 12.8%, to $23.4 billion, largely due to a drop in other income.
- The credit union system’s provision for loan and lease losses or credit loss expenses increased $3.2 billion, or 257.3%, to $4.4 billion at an annual rate in the first three quarters of 2022.
- The delinquency rate at federally insured credit unions was 53bp in the third quarter of 2022, up 7bp compared with the third quarter of 2021.
- Regular shares increased $39.5 billion, or 6.2%, to $679.5 billion. Other deposits increased $37.2 billion, or 4.9%, to $791.5 billion, led by money market accounts, which grew $24.0 billion, or 6.1%, over the year.
- The credit union system’s net worth increased by $21.3 billion, or 10.3%, over the year to $227.8 billion. The aggregate net worth ratio – net worth as a percentage of assets – stood at 10.59% in the third quarter of 2022, up from 10.23% one year earlier.
Continued Growth in Lending, Assets, Insured Shares Reported in Third Quarter