Losses for smaller credit unions could impact the entire industry.
While larger credit unions increased net income again in the fourth quarter, the 1,565 credit unions with less than $10 million assets saw their losses nearly double.
NCUA data released this week shows net losses for the smaller credit unions were $3.4 million in the three months that ended Dec. 31, sinking deeper from a $1.8 million loss in 2016′s fourth quarter.
The small credit unions represent 1.2% of total members and 0.5% of assets at federally insured credit unions, but they account for 28% of the 5,689 credit unions operating Dec. 31.
The 4,124 larger credit unions earned $2.5 billion during the fourth quarter, up 9%. Most of those gains, in turn, were made among the largest tier—those with $500 million or more in assets.
The 539 largest credit unions earned $2.2 billion in the fourth quarter, up 8% from a year ago. They accounted for 69% of the nation's 112.7 million credit union members, and 76% of the nation's nearly $1.4 trillion in credit union assets.
The 3,585 credit unions with assets between $10 million and $500 million in assets showed more improvement than the largest credit unions, but their annualized return on average assets was 0.40% compared with 0.74% for the largest tier.
The smallest credit unions had ROA of -0.21% in the fourth quarter, down 9 basis points from a year ago. Their net interest income rose 2% to $46.1 million and non-interest income fell 1% to $12.3 million, while expenses rose 9% to $5.5 billion.
The mid-size credit unions showed significantly higher non-interest income growth and lower expense growth than the largest credit unions. Their net interest income rose 8% to $2.2 billion, and non-interest income rose 6% to $1.2 billion. Pay and benefits rose 7% to $1.5 billion, while other non-interest expenses rose 6% to $1.5 billion.
Among the largest credit unions, net interest income rose 13% to $6.4 billion and non-interest income rose 4% to $3.6 billion in the fourth quarter. Expenses rose 10% to $7.8 billion.
Rising into the highest tier in the fourth quarter were:
- Lafayette FCU, Rockville, Md. ($516.8 million in assets, 20,308 members)
- SUN FCU, Maumee, Ohio ($513.4 million in assets, 38,151 members)
- CBC FCU, Oxnard, Calif. ($507.2 million in assets, 26,811 members)
- Bellwether Community CU, Manchester, N.H. ($504.4 million in assets, 36,568 members)
Those dropping out of the top tier were: Proponent FCU, Nutley, N.J. ($498.7 million in assets, 25,589 members); People's Trust FCU, Houston, Texas ($497.2 million in assets, 32,744 members) and Progressive CU, New York ($485.9 million in assets, 3,075 members).
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