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Board Action Bulletin

3 to 6 Basis Points Share Insurance Fund Premium Range Recommended for Credit Union Budgeting Purposes

ALEXANDRIA, Va. (Nov. 17, 2016) – The National Credit Union Administration Board held its tenth open meeting of 2016 at the agency’s headquarters here today and unanimously approved two items:

• Operating budgets for 2017 and 2018 to fund NCUA’s essential activities and strategic priorities, including implementing the recommendations of the Exam Flexibility Initiative.
• A final rule making technical changes to the agency’s Community Development Revolving Loan Fund regulation to improve transparency, organization and ease of use by credit unions.

Additionally, the Board received three briefings on:

• The performance of the National Credit Union Share Insurance Fund in the third quarter;
• The Share Insurance Fund’s equity ratio projections and the recommended 2017 premium range of 3 to 6 basis points for credit union budgeting purposes; and
• The 2017 overhead transfer rate.

Budgets Reflect Reduced Staffing Levels, Maintain Critical Agency Capacity

The NCUA Board-approved operating budgets for 2017 and 2018 maintain critical agency capacity and reflect reduced staffing levels.

“This is an historic budget,” NCUA Board Chairman Rick Metsger said. “It is more transparent than any previous budget, it provided more opportunities for stakeholder input than any previous budget and it represents a change in direction. It also incorporates major changes in our supervision and examination process and maintains the principle of regulatory independence while being responsive to legitimate stakeholder concerns. Finally, it is a non-partisan budget, an example of genuine partnership and how government should run.”

The Board-approved budgets adopt the 10 recommendations contained in the report of the
Exam Flexibility Initiative (opens new window). The recommendations provide greater examination efficiency, greater flexibility for credit unions and the agency and improved coordination with state supervisors.

The 2017 operating budget is 1.6 percent lower than the 2017 budget approved by the Board in November 2015 and 2.5 percent higher than the 2016 budget. The 2018 operating budget represents a 4.7 percent increase over the 2017 budget.

While NCUA staffing will decrease in 2017 and 2018, all reductions will come through attrition. Total NCUA staffing will fall by 1.4 percent in 2017 and 1.8 percent in 2018.

The Board’s actions are summarized in the table below:

Budget	2017	2018
NCUA Operating Budget	$298.2 million	$312.1 million
Maximum Full-Time Equivalent Staffing Levels	1,230	1,208
Temporary Corporate Credit Union Stabilization Fund Budget	$4.1 million	$4.2 million
Capital Budget	$15.8 million	$15.4 million

 

The adoption of the budgets for 2017 and 2018 follow an Oct. 27 budget briefing.

“Last month’s budget briefing with stakeholders proved to be a significant step in making NCUA’s budgetary process more efficient, effective, transparent and accountable,” NCUA Board Member J. Mark McWatters said, “and to further increase budget transparency, NCUA has worked to post considerable information online in recent years. I am pleased we were ultimately able to develop an operating budget that took into account industry comments and, as a result, included some further expense reductions.”

“While we have made steps in the right direction, the budgetary process remains a work in progress,” McWatters said. “The next step will involve considering recommendations for the overhead transfer rate methodology early next year, and we should consider further changes at the mid-session budget review.”

NCUA staff will make recommendations to the Board about overhead transfer rate early next year. The Board also plans to continue its practice of performing a mid-year budget review, which will be presented at the Board’s July 2017 open meeting.

Detailed information about NCUA’s operating budgets for 2017 and 2018, including office budgets and agency fact sheets, is available on the agency’s
Budget Resource Center.

Share Insurance Premium Range Recommended

NCUA’s Office of Examination and Insurance recommended a share insurance premium range of 3 to 6 basis points in 2017.

The proposed range is only for credit union budgeting purposes. Credit unions should not actually accrue for a premium until one is approved by the NCUA Board. The Board will decide during 2017 whether to declare a premium.

Growth in insured shares in credit unions combined with a continuing low interest-rate environment is causing a decline in the Share Insurance Fund’s equity ratio.

“Just like a homeowner who checks the roof and makes repairs before the storm comes, NCUA and credit unions must do the same for the Share Insurance Fund before the next economic downturn,” Metsger said. “In recent years, the economy has stabilized, and credit unions as a whole have experienced considerable growth in insured shares. To ensure the fund continues to have the resources it needs, credit unions next year may need to pay their first share insurance premium since 2010. Such an investment would prudently protect member deposits.”

The Share Insurance Fund is capitalized with a combination of credit union funds held on deposit and retained earnings. As of the third quarter of 2016, the size of the Share Insurance Fund was $13.3 billion, with a net position of $13.1 billion made up of $10 billion of credit unions’ one-percent capital deposit and the remainder reflecting retained earnings and unrealized gains or losses on investments.

Federal law requires the normal operating level for the Share Insurance Fund to fall between 1.20 percent and 1.50 percent. The NCUA Board decided in 2007 to set the normal operating level at 1.30 percent. Current projections indicate the equity ratio will decline to between 1.24 percent and 1.27 percent during 2017. The present low interest-rate environment makes it difficult to generate sufficient retained earnings to bring the equity ratio back to 1.30 percent.

Staff do not anticipate a Temporary Corporate Credit Union Stabilization Fund assessment in 2017.

The presentation on the Share Insurance Fund equity ratio and premium projections is available online in the agency’s
Budget Resource Center.

Operating Fee Scale Increases for Federal Credit Unions

The Chief Financial Officer reported that the 2017 operating fee will increase 25.5 percent for natural-person federal credit unions, and the corporate federal credit union operating fee scale will not change.

NCUA uses the operating fee to pay for the costs of regulating federal credit unions. The agency will charge the fee in March 2017, and payments will be due April 17, 2017. Consistent with recent practice, federal credit unions with assets of less than $1 million will not be assessed an operating fee.

In all, federal credit unions will fund 67 percent of NCUA’s 2017 operating budget, while state-chartered credit unions will fund 33 percent.

More information on the operating fee is available online at NCUA’s
Budget Resource Center.

Overhead Transfer Rate Declines

The Office of Examination and Insurance reported the overhead transfer rate will decline to 67.7 percent in 2017 from 73.1 percent in 2016.

The overhead transfer from the Share Insurance Fund covers expenses associated with NCUA’s insurance-related activities. The rate is calculated annually through a methodology adopted by the Board in 2003.

In January 2016, the NCUA Board approved publishing a request for comments on that methodology in the
Federal Register. The agency received 40 comment letters addressing a broad range of issues requiring additional research. NCUA staff is reviewing options for the Board to consider to improve the overhead transfer rate methodology and plans to deliver a report with recommended changes to the Board by Jan. 31, 2017.

More information on the overhead transfer rate methodology, including a history of how the rate is calculated, is available online at NCUA’s
Budget Resource Center.

Share Insurance Fund Has Net Income of $12.1 Million in Third Quarter

The third quarter of 2016 saw consistent trends in income and operating expenses for the Share Insurance Fund, due to recoveries on assets from failed credit unions.

For the third quarter of 2016, the Share Insurance Fund had a net income of $12.1 million. The fund ended the quarter with an equity ratio of 1.27 percent. The equity ratio is calculated on an insured share base of $999.9 billion and includes the recently billed capitalization deposit adjustment.

Third-quarter investment and other income was $57.1 million. Operating expenses were $56.7 million. The provision for insurance losses was reduced by $11.7 million.

Overall, the amount of assets in CAMEL codes 3, 4 and 5 credit unions has decreased 52 percent since reaching a high of $205.6 billion in September 2010. Assets of credit unions rated CAMEL code 4 or 5 were 0.8 percent of federally insured credit union assets for the third quarter.

For the third quarter of 2016, the Chief Financial Officer reported:

• The number of CAMEL code 4 and 5 credit unions declined 13.7 percent from the third quarter of 2015, from 233 to 201. More than half were credit unions with assets of $10 million or less.
• Assets of CAMEL code 4 and 5 credit unions were $9.7 billion, a 14.1 percent increase from the third quarter of 2015.
• The number of CAMEL code 3 credit unions declined 10.3 percent from the third quarter of 2015, from 1,297 to 1,164.
• Assets of CAMEL 3 credit unions were $88.7 billion, a 5.3 percent decline from the third quarter of 2015.

One federally insured credit union failed during the third quarter. In all, 12 credit unions have failed this year. Total losses associated with failures through the third quarter were $8.5 million.

The third-quarter Share Insurance Fund figures are preliminary and unaudited.

Board Streamlines Community Development Revolving Loan Fund Rule

The process for applying for funding from the Community Development Revolving Loan Fund will become more transparent, flexible and easier to navigate with the NCUA Board’s approval of a final rule (Part 705) amending the agency’s regulations.

The final rule is identical to the proposed rule and removes from the regulation the $300,000 aggregate limit for loans to individual credit unions, which provides NCUA with greater flexibility in designing loan programs. The final rule also makes the application process less burdensome by removing the former requirement that federally insured, state-chartered credit unions obtain approval from their state regulators before submitting a loan application.

The final rule does not change the general guidelines for Community Development Revolving Loan Fund loan and grant programs.

The final rule, available online
here (opens new window), will become effective 30 days after publication in the
Federal Register.

NCUA tweets all open Board meetings live. Follow @TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at www.ncua.gov. NCUA also live streams, archives and posts videos of open Board meetings online.

Changes Give Credit Unions an Average of Seven Additional Days to File

ALEXANDRIA, Va. (Nov. 22, 2016) – Beginning with the Dec. 31, 2016, reporting cycle, federally insured, natural-person credit unions will have until the final Sunday of the month following the end of the quarter to file Call Reports, the National Credit Union Administration announced today.

Call Report due dates for 2017 will be:

Cycle Date	Due Date
Dec. 31, 2016	Jan. 29, 2017
March 31, 2017	April 30, 2017
June 30, 2017	July 30, 2017
Sept. 30, 2017	Oct. 29, 2017

 

Credit unions will now have, on average, an additional seven days to file Call Reports. Additional details about the Call Report filing due dates and processing for 2017 will be posted on the
Credit Union Online webpage.

NCUA examiners continue to be an important part of the validation process. Using the last Sunday of the month following the end of the quarter ensures NCUA field staff will be able to better plan their schedules for conducting Call Report validations while providing credit unions greater flexibility in filing.

NCUA may consider other options for setting future Call Report filing deadlines, such as using a fixed date like the 30th of the month, based on our experience with the changes announced today and other possible improvements to further streamline the process.

NCUA also continues working to improve Call Report data collection. The comprehensive review of the Call Report and Credit Union Profile content, announced in May, is still under way. You can find more information online at NCUA’s
Call Report Modernization webpage.

American Heritage Federal Credit Union Assumes Members, Shares and Deposits

ALEXANDRIA, Va. (Nov. 29, 2016) – The National Credit Union Administration today liquidated First African Baptist Church Federal Credit Union of Sharon Hill, Pennsylvania.

American Heritage Federal Credit Union of Philadelphia immediately assumed First African Baptist’s members and deposits.

The new American Heritage members should experience no interruption in normal services. Member deposits remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

American Heritage Federal Credit Union is a federally chartered credit union with assets of more than $1.7 billion serving more than 150,000 members, according to its most recent Call Report. American Heritage operates more than 30 branch offices, and the branch nearest to First African Baptist is located at 2101 Market Street, Philadelphia. Members with questions about their accounts should contact American Heritage at 215.969.0777 or toll-free at 800.342.0008 between 8 a.m. and 8 p.m. Monday through Friday.

Members may also visit the Share Insurance Section (opens new window) of NCUA’s MyCreditUnion.gov (opens new window) website at any time for more information about their insurance coverage.

NCUA made the decision to liquidate First African Baptist Church Federal Credit Union after determining the credit union was insolvent with no prospect of restoring viable operations.

At the time of its liquidation and subsequent purchase and assumption by American Heritage Federal Credit Union, First African Baptist Church Federal Credit Union had assets of $76,188 and served 261 members, according to its most recent Call Report. Chartered in 1978, First African Baptist served members and employees of the First African Baptist Church in Darby Township, Pennsylvania.

First African Baptist Church Federal Credit Union is the eleventh federally insured credit union liquidation of 2016.

ALEXANDRIA, Va. (Nov. 30, 2016) – Reading financial statements is an essential job for any credit union board member, and a new video series from the National Credit Union Administration can help make that job easier.

Understanding Financial Statements, now available on NCUA’s YouTube channel (opens new window), is a five-part series that discusses the balance sheet and income statement, key line items in each and the relationship between the documents. The videos also will help you know what questions, you, as a board member, need to ask your staff about your credit union’s performance.

NCUA regulations (opens new window) require that federal credit union directors have a working familiarity with basic finance and accounting practices, including the ability to read and understand the federal credit union’s balance sheet an income statement and to ask, as appropriate, substantive questions of management and the internal and external auditors.

There is a quiz at the end of the series, and viewers who pass that will receive a Certificate of Completion.

Understanding Financial Statements is part of a comprehensive series of educational videos developed for credit union board members by NCUA’s Office of Small Credit Union Initiatives. The videos are available on the Small Credit Union Learning Center webpage.

The Office of Small Credit Union Initiatives fosters credit union development and the effective delivery of financial services for small credit unions, minority depository institutions, new credit unions, and credit unions with a low-income designation. The office also publishes FOCUS, a monthly electronic newsletter with helpful information for all credit unions.

ALEXANDRIA, Va. (Dec. 1, 2016) – The video recordings of the Oct. 27, 2016, open meeting of the National Credit Union Administration Board and the agency’s budget briefing are now available on the agency’s website.

Archived videos of past Board meetings may be viewed here, and each video remains on the site for one year.

At the October meeting, the Board unanimously approved five items:

• A final rule modernizing existing field-of-membership definitions for federal credit unions to improve consumer access to affordable credit.
• A proposed rule to provide further field-of-membership community charter options for federal credit unions. 
• A final rule re-naming NCUA’s consumer office as the Office of Consumer Financial Protection and Access to clarify its function and role in promoting consumer access to affordable financial services.
• A final rule adjusting civil monetary penalties for inflation, as required by Congress.
• An interagency proposed rule to implement the private flood insurance requirements for loans in special flood hazard areas contained in a 2012 statute.

At the open Board meeting, the Office of Examination and Insurance also conducted a briefing on issues relating to credit unions using supplemental capital for risk-based capital calculations.

At the agency’s budget briefing, NCUA’s Executive Director and Chief Financial Officer presented a detailed proposal for the agency’s 2017–2018 budget, and the Board heard comments from credit union industry stakeholders. The video of the budget briefing may be viewed on the agency’s budget resource center webpage.

NCUA posts these videos as part of the agency’s ongoing efforts to provide transparency and to allow those unable to attend Board meetings the opportunity to become better informed. An interval between the meeting and posting is necessary for the videos to comply with Section 508 of the Rehabilitation Act for the hearing and visually impaired. The Board Actions page of NCUA’s website has more information, including Board agendas, which are posted at least one week in advance of each open meeting, copies of Board Action Bulletins, which summarize the meetings, copies of Board memorandums and other documents.

ALEXANDRIA, Va. (Dec. 5, 2016) – Insured shares and deposits in federally insured credit unions grew, for the first time, to more than $1 trillion and membership reached 106.2 million in the third quarter of 2016, the National Credit Union Administration reported today.

“By almost any measure, America’s credit unions as a whole continue to grow,” NCUA Board Chairman Rick Metsger said. “Rising credit union membership has boosted deposits, and loans have continued to grow at a double-digit pace. At the same time, the overall delinquency rate has held steady, and the shift away from long-term investments has continued. Despite these positive trends, federally insured credit unions must guard against risks on the horizon like rising interest rates and regional economic downturns, particularly in energy-producing states.”

NCUA released the new figures based on Call Report data submitted to and compiled by the agency for the quarter ending Sept. 30, 2016. 

Loans Outstanding Up 10.1 Percent

Total loans outstanding at federally insured credit unions reached $847.1 billion at the end of the third quarter of 2016, an increase of 10.1 percent from one year earlier.

Year over year, loans grew in every major category, including:

• New auto loans increased 15.8 percent to $112.2 billion.
• Used auto loans rose 12.3 percent to $178.1 billion.
• Total real estate lending grew 8.2 percent to $421 billion.
• Net member-business loan balances increased 14.0 percent to $63.9 billion.
• Non-federally guaranteed student loans expanded 10.1 percent to $3.8 billion.
• Payday alternative loans originated at federal credit unions rose 9.5 percent to $129.5 million.

The loans-to-shares ratio was 78.6 percent, up from 77.5 percent a year earlier. The same ratio was slightly higher for low-income credit unions at 80.6 percent. 

Investment Levels Continue General Decline

Total investments by federally insured credit unions stood at $266.3 billion at the end of the third quarter, down 1.4 percent from the third quarter of 2015. Short-term investments grew from the end of the third quarter of 2015, while other investments declined in that period:

• Investments with maturities of less than one year totaled $75 billion, an increase of 11.5 percent.
• Investments with maturities of one to three years were $100.7 billion, a decline of 4.5 percent.
• Investments with maturities of three to 10 years were $87 billion, a decline of 6.4 percent.
• Investments with maturities greater than 10 years were $3.6 billion, a decline of 19.7 percent.

The system’s ratio of net long-term assets to total assets was 32.0 percent at the end of the third quarter, down from 32.4 percent a year earlier. 

Little Change in Overall Delinquency Rate; Charge-Off Rates Increase Slightly

The delinquency rate at federally insured credit unions was 77 basis points in the third quarter, down 1 basis point from a year earlier.

• The delinquency rate for fixed real estate was 53 basis points, down from 65 basis points in the third quarter of 2015.
• The delinquency rate for credit cards was 104 basis points, compared to 97 basis points a year earlier.
• The delinquency rate for non-federally guaranteed student loans was 136 basis points, unchanged from a year earlier.
• The member business loan delinquency rate was 152 basis points, compared to 111 basis points a year earlier.

The system’s net charge-off ratio increased to an annualized 53 basis points in the first three quarters of 2016, up from 46 basis points in the first three quarters of 2015.

Asset Growth and System Consolidation Continue

Total assets in federally insured credit unions reached $1.28 trillion at the end of September, an increase of 8.2 percent for the year ending in the third quarter.

Nevertheless, credit union system consolidation, primarily the result of mergers, also continued in the third quarter. The number of federally insured credit unions fell to 5,844, down 246 from a year earlier. Approximately 70 percent of the decline occurred in credit unions with less than $10 million in assets. In all, there were 3,648 federal credit unions and 2,196 federally insured, state-chartered credit unions at the end of the third quarter.

Low-Income Credit Unions Rising

A total of 2,459 federally insured credit unions carried a low-income designation at the end of the quarter, a 7.6 percent increase from a year earlier. Forty-two percent of federally insured credit unions now have the low-income designation, and nearly 36 percent of credit union members belong to a low-income credit union.

Credit Unions Remain Well-Capitalized

Overall, the credit union system’s aggregate net worth ratio was 10.85 percent as of the end of September, the same as the previous quarter. One year earlier, the system’s aggregate net worth ratio was 10.99 percent.

The percentage of federally insured credit unions that were well-capitalized remained steady in the second quarter with 97.9 percent reporting a net worth ratio at or above the Federal Credit Union Act’s definition of well-capitalized. At the end of the third quarter of 2016, less than 1.0 percent of federally insured credit unions were less than adequately capitalized.

Net Income Grows; Aggregate Return on Average Assets Ratio Slightly Lower

Federally insured credit unions reported an annualized net income of $9.7 billion in the first three quarters of 2016, up 5.7 percent from the $9.2 billion reported one year earlier.

The annualized return on average assets ratio for federally insured credit unions stood at 78 basis points on Sept. 30, 2016, down from 80 basis points a year earlier. The median return on average assets was 37 basis points at an annual rate during the first three quarters of 2016, up slightly from 36 basis points a year earlier.

System Growth Remains Concentrated in Larger Credit Unions

The long-term trend of large federally insured credit unions leading system growth continued in the third quarter. 

Credit unions with assets of $500 million or more led the system in most performance measures. With $938.4 billion in combined assets, these 498 credit unions held 73.5 percent of total system assets. The 4,292 credit unions with $100 million or less in assets held 8.2 percent of total system assets. 

Consistent with previous quarters, large credit unions reported the greatest growth in loans, membership and net worth, as well as the highest return on average assets. Credit unions with assets of less than $100 million saw smaller growth in net worth and loans, lower return on average assets, and, for credit unions with assets of less than $10 million, declining membership. 

For selected metrics, the table below provides a summary, by asset category, of federally insured credit unions’ current ratios and annualized growth rates at the end of the third quarter of 2016:

Number of Credit Unions	498	1,054	2,601	1,691
Net Worth Ratio	10.7 percent	10.9 percent	11.8 percent	15.1 percent
Net Worth Growth	+8.7 percent	+5.9 percent	+3.4 percent	+0.7 percent
Loan Growth	+11.6 percent	+8.5 percent	+5.2 percent	+1.8 percent
Membership Growth	+6.9 percent	+2.8 percent	+0.5 percent	-1.2 percent
Return on Average Assets	89 basis points	55 basis points	36 basis points	12 basis points

NCUA makes the complete details of the September 2016 Call Report data available online here. A summary of third-quarter performance is available here, and financial trends data for federally insured credit unions are available here.

Policy Change Allows Access to One Additional Authorized Official

ALEXANDRIA, Va. (Dec. 6, 2016) – Credit unions will have more flexibility to use the National Credit Union Administration’s Consumer Assistance Complaint portal, the agency announced today. 

NCUA has improved its consumer complaint process to allow for expanded portal access by additional authorized credit union staff.

Credit union chief executive officers may now designate an additional credit union employee or official to use the portal to view consumer complaints submitted to the Consumer Assistance Center concerning their credit unions. Previously, only CEOs had access to the portal on behalf of their credit unions. This expanded access will help credit unions provide timely responses to consumer complaints received through the portal.

The portal, which opened in November 2015, is located on NCUA’s MyCreditUnion.gov (opens new window) site. It allows credit unions to correspond with NCUA’s Consumer Assistance Center about complaints concerning their institutions. Information contained within the portal is not accessible by the public.

Using the portal is voluntary; however, users must first register to gain access. Credit unions that want to use the portal should review the newly updated frequently asked questions (opens new window)available on the agency’s website for information on how to register or request an additional user be added to their user profiles. 

NCUA’s Consumer Assistance Center also implemented complaint resolution procedures last year to improve the way the agency handles consumer complaints involving federal consumer financial protection laws and regulations. NCUA informed federally insured credit unions about these improvements in a June 2015 Letter to Credit Unions. 

Under the new complaint handling procedures, a complaint filed with the Consumer Assistance Center involving a federal consumer financial protection matter is sent to the credit union for attempted resolution, as appropriate. If the complaint remains unresolved after 60 days, the Consumer Assistance Center may begin its own investigation to determine compliance with federal consumer financial protection laws and regulations. 

Member Deposits at S M Federal Credit Union Remain Insured Up to $250,000

ALEXANDRIA, Va. (Dec. 12, 2016) – The National Credit Union Administration has issued a cease and desist order to S M Federal Credit Union of Philadelphia, Pennsylvania.

S M Federal Credit Union members’ accounts remain insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States. Individuals may visit the
MyCreditUnion.gov (opens new window) website at any time for more information about their insurance coverage.

S M Federal Credit Union officials have consented to the order, which requires the following actions:

• Provide credit union records to the compensated auditor;
• Complete a member account verification and supervisory committee audit;
• Reconcile and maintain accurate financial statements and member share and loan records;
• Calculate and track loan delinquency;
• Actively and effectively collect past due loans;
• Cease granting new loans;
• Ensure the supervisory committee is fully staffed and fulfilling all obligations; and
• Provide the agency with monthly financial statements; and board and committee minutes.

Chartered in 1959, S M Federal Credit Union has assets of $56,005 and serves 115 members, according to the credit union’s most recent Call Report.

A copy of the final order is posted on the NCUA website
here (opens new window). NCUA enforcement orders can be inspected Monday through Friday at NCUA’s Office of General Counsel from 9 a.m. to 4 p.m. Eastern. Copies may also be ordered by mail from NCUA at 1775 Duke Street, Alexandria, VA 22314-3428.

ALEXANDRIA, Va. (Dec. 12, 2016) – Federally insured credit unions saw continued improvement in nearly every category during the third quarter of 2016, according to state-level data compiled by the National Credit Union Administration and released today.

Nationally, median loan growth in federally insured credit unions was 3.9 percent during the year ending in the third quarter. In the same period, median asset growth was 4.2 percent; the median rate of growth in deposits and shares was 4.5 percent; and the median loans-to-shares ratio rose to 63 percent.

The NCUA Quarterly U.S. Map Review, available online here, tracks performance indicators for federally insured credit unions in all 50 states and the District of Columbia. The review also includes information on two important state-level economic indicators: unemployment rates and home price changes.

Every State Shows Positive Median Loan Growth

Nationally, median growth in loans outstanding was 3.9 percent over the year ending in the third quarter of 2016, down slightly from 4.1 percent the previous year. The highest median growth rates for loans were in Washington (9.7 percent) and Oregon (8.1 percent). Median loan growth was lowest in Pennsylvania (0.1 percent) and Connecticut (0.8 percent).

Oregon Reports Highest Median Asset Growth Rate

Median asset growth was 4.2 percent nationally in the year ending in the third quarter of 2016, up from 2.4 percent a year earlier. Median asset growth was fastest in Oregon (8.7 percent), followed by Washington and Arizona (both 7.5 percent). Median asset growth was lowest in the District of Columbia (0.6 percent) and Arkansas (1.8 percent).

Shares and Deposits Rise in Every State

At the median, shares and deposits rose in every state over the year ending in the third quarter. Nationally, the median growth rate in shares and deposits was 4.5 percent, up from 2.3 percent a year earlier.

The median growth rate in shares and deposits was highest in Oregon (8.5 percent) and Arizona (8.2 percent). The median growth rate in shares and deposits was lowest in the District of Columbia (0.2 percent) and Arkansas (2.0 percent).

80 Percent of Credit Unions Report Positive Net Income

Nationally, 80 percent of federally insured credit unions had positive net income during the first three quarters of 2016, up from 78 percent in the first three quarters of 2015.

At least half of credit unions in every state had positive net income during the first three quarters of this year. The share of credit unions with positive net income was highest in Nevada (100 percent) and Iowa (94 percent). The share was lowest in Delaware (58 percent), followed by Arkansas, the District of Columbia and Wyoming (all 66 percent).

Nevada, Vermont Lead on Annualized Returns on Average Assets

Nationally, the median annualized return on average assets at federally insured credit unions was 37 basis points over the first three quarters of 2016, up from 35 basis points in the first three quarters of 2015.

Nevada (81 basis points) had the highest median return on average assets in the first three quarters of the year, followed by Vermont (79 basis points). Delaware (11 basis points) reported the lowest median return, followed by the District of Columbia (15 basis points).

Alaska, Idaho Pace Nation in Highest Median Loans-to-Shares Ratios

Nationally, the median ratio of loans outstanding to total shares and deposits was 63 percent at the end of the third quarter of 2016, compared to 62 percent a year earlier. The median loans-to-shares ratio was highest among credit unions in Alaska (87 percent) and Idaho (86 percent). The median loans-to-shares ratio was lowest in Delaware (43 percent) and Hawaii (46 percent).

Median Total Delinquency Rate Down From a Year Earlier

The median total delinquency rate at federally insured credit unions was 0.7 percent nationally in the third quarter of 2016, down slightly from 0.8 percent a year earlier. At the end of the third quarter, the median delinquency rate was lowest in New Hampshire and Nevada (both 0.3 percent) and highest in New Jersey (1.7 percent), followed by Delaware and Louisiana (both 1.3 percent).

Larger Credit Unions Still Leading Membership Growth

Overall, credit union membership continued its growth during the year ending in the third quarter of 2016; however, at the median, membership declined 0.1 percent.

The median membership growth rate was negative 0.2 percent over the previous year. Overall, 51 percent of federally insured credit unions had fewer members at the end of the third quarter of 2016 than a year earlier.

Approximately 75 percent of credit unions with declining membership had assets of less than $50 million.

Idaho (2.3 percent) had the highest median membership growth rate over the year ending in the third quarter of 2016, followed by Alaska (2.1 percent). Median membership growth was negative in 22 states. At the median, membership declined the most in Pennsylvania (-1.6 percent) and Oklahoma (-1.3 percent).

Read the Latest Issue of “The NCUA Report” Online

ALEXANDRIA, Va. (Dec. 13, 2016) – Insured share growth in credit unions, along with the continuing low interest-rate environment, is causing the National Credit Union Share Insurance Fund’s equity ratio to decline. As a result, staff recommended at the November Board meeting a share insurance premium of between 3 to 6 basis points.

In the latest issue of The NCUA Report newsletter, NCUA’s Office of Examination and Insurance details the factors affecting the fund’s equity ratio and why an insurance premium may be necessary. The December 2016 issue is now available online here.

The agency’s newsletter features columns from NCUA Board Chairman Rick Metsger and Board Member J. Mark McWatters, as well as articles from several NCUA offices on the agency’s initiatives and important information on regulatory, supervisory and compliance issues at federally insured credit unions.

Articles in this month’s issue include:

• Chairman’s Corner: Looking Back at 2016: A Year of Change to Help American Consumers
• Board Member McWatters’ Perspective: Issues to be Tackled in 2017
• Board Actions: NCUA Board Approves 2017–2018 Budget with Exam Flexibility Initiative Recommendations
• The ABCs of Loan Participation Due Diligence
• Don’t Let Your Members Be Victims of a Scam This Holiday Season
• New Guidebook Has Advice for Credit Unions on Digital Services Contracts
• NCUA Sets 2017 Call Report Deadlines
• NCUA Modernizing Its Platforms to Adapt to Shifting Financial Services Environment
• NCUA Releases New Board Member Video on the Basics of Financial Statements

Published monthly, The NCUA Report is NCUA’s flagship publication. The newsletter highlights important Board activity and key issues that credit union managers, staff and volunteers need to know. If interested, you can subscribe to the online version of the newsletter here (opens new window). Previous issues of The NCUA Report are available online here (opens new window).