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Credit Unions Demonstrate Consistent Strength

Savings expand as delinquencies near six year low

Alexandria, Va., May 25, 2006 – Credit unions are experiencing solid share growth and declining loan delinquencies according to first quarter 2006 Call Report data submitted by the nation’s 8,617 federally insured credit unions. 

The first quarter of 2006 ended with federally insured credit unions reporting a 0.59 percent loan delinquency ratio, down from the 2005 year-end delinquency ratio of 0.73 percent. During this time frame, the amount of delinquent loans and net charge-offs declined an annualized 13.1 percent.

Total loan growth expanded 10.39 percent between March 2005 and March 2006, while between December 2005 and March 2006 loans grew 0.94 percent and the loan to share ratio declined from 79.4 to 77.8 percent

“I commend credit unions for their continued expert financial management skills as the pace of loan demand slowed, savings grew and net worth continued to maintain a consistent, healthy level in the early months of 2006,” NCUA Chairman JoAnn Johnson said. “Credit unions saw an influx of funds, and repeating tradition, first quarter loan delinquencies declined 18.4 percent and net charge-offs declined 5.7 percent as recoveries surpassed first quarter 2005 figures. The annualized net charge-off ratio dropped to 0.49 percent while recoveries grew an annualized 15.1 percent, and the first quarter ended with an average credit union net worth ratio of 11.16 percent.”

The major balance sheet categories and membership growth at federally insured credit unions between December 31, 2005, and March 31, 2006, follows:

• Assets increased 2.5 percent to $695.4  billion from $678.7 billion;
• Loans increased 0.9 percent to $462.5 billion from $458.2 billion;
• Shares increased 3.0 percent to $594.7 billion from $577.4 billion;
• Investments increased 0.92 percent to $149.3 billion from $148.0 billion;
• Net worth to total assets ratio declined to 11.16 percent from 11.24 percent; and
• Membership increased 0.5 percent to 84.9 from 84.5 million members.

Examining data details, 1st mortgage real estate loans grew 2.2 percent reflecting continued growth in credit unions’ largest income producing loan category during the first three months of 2006 while other real estate loans, such as second mortgage and home equity loans, grew 2.7 percent. New auto loans grew 0.9 percent and used auto loans declined a slight 0.4 percent. Unsecured credit cards loans also contracted by 3.9 percent. 

Total shares increased 3.0 percent based on an 4.02 percent increase in regular shares, a 3.13 percent increase in  other types of savings, and a 0.15 percent decline in share draft funds during the first quarter of 2006.

Detailed financial information is available online 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 nearly 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.  NCUA is funded by credit unions, not federal tax dollars.