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Credit Unions Continue Strong Performance

Net Worth is High as Delinquencies Decline

Alexandria, Va., May 23, 2005 – The nation’s federally insured credit unions are well capitalized with net worth near a 5-year high at 10.93 percent, according to first-quarter 2005 Call Report data submitted by the nation’s 8,945 federally insured credit unions.

Earnings remain strong. Credit unions reported a 0.92 percent return on average assets, and as loans grow at a 4.57 percent annualized rate, loan delinquencies continue to decline.

“Loan delinquency is near a 3-year low at 0.64 percent, and net charge-offs also declined in the first quarter of 2005,” said Chairman JoAnn Johnson. “In fact, total loan delinquencies declined 9.4 percent in the first three months of 2005 while recoveries grew at an 18.8 percent annualized rate. Credit unions consistently exhibit strong performance as they help members benefit from the healthy economic climate, and NCUA is doing its part by acting to reduce regulatory burden and encouraging legislation to enhance and maintain a safe, sound credit union system.”

The major balance sheet categories and membership growth at federally insured credit unions between year-end 2004 and March 31, 2005, follows:

• Assets increased 2.38 percent, to $662.4 billion from $647.0 billion;
• Loans increased 1.14 percent, to $418.9 billion from $414.3 billion;
• Shares increased 2.54 percent, to $570.2 billion from $556.1 billion;
• Investments increased 2.52 percent, to $163.7 billion from $159.7 billion;
• Net worth increased 2.11 percent, to $72.4 billion from $70.9 billion; and
• Membership grew 0.57 percent, to 84.0 million members.

In the past 12 months, federally insured credit union membership grew by 1.2 million people while assets grew by $34.7 billion. Net long-term assets remain near all-time highs at 25.18 percent. Credit unions should have adequate interest rate risk measurement processes in place as well as asset/liability management policies and procedures sufficient for the level of risk.

A consolidated balance sheet, is available on the NCUA website at http://www.ncua.gov/data/FOIA/foia.html.

The National Credit Union Administration charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the accounts of more than 83 million account holders in all federal credit unions and the majority of state-chartered credit unions.