Income Rises for Credit Unions in First Quarter Despite Loan Drop
The latest reports show interest income outpaced expenses as loan quality improved.
Credit union net income rose in the first quarter despite falling loan originations as net interest income swelled and loan quality improved.
NCUA data released Thursday showed that the nation’s 5,335 federally insured credit unions generated $3.5 billion in net income during the three months that ended March 31, up 11.9% from 2018’s first quarter.
The annualized return on average assets was 0.95% for the first quarter, up 5 basis points from a year earlier.
The biggest factor was net interest income before loan loss provisions, which rose 11.4% to $9.9 billion.
Margins also improved as loan loss provisions fell 5% to $1.6 billion. Loans 60 days or more delinquent represented 0.57% of the loan portfolio on March 31, down from 0.66% a year earlier, and 0.71% on Dec. 31, 2018. Net charge-offs fell 3 basis points to an annualized 0.57%.
Fees and other operating income were relatively flat. Fee income rose 0.6% to $2.1 billion, while other operating income rose a scant 0.1% to $2.8 billion.
Expenses rose slightly faster than asset growth. Employee compensation and benefits rose 7.4% to $6 billion. The number of full-time employees rose 4.4% to 290,322, while part-timers fell 3.5% to 24,732.
Other non-interest expenses rose 6.9% to $5.6 billion.
Total loan originations fell 5.5% to $110.4 billion. Real estate originations fell 12.2% to $33.2 billion, while other loans fell 2.3% to $77.2 billion.
The reports also showed:
- Members rose 4% to 117.3 million.
- Total assets rose 6.3% to $1.51 trillion.
- Net worth grew 8.8% to $167.8 billion.