Credit Union Earnings Rise to AllTime High in 2012

first_imgCredit Union Earnings Rise to All-Time High in 2012 Agents & Brokers Attorneys & Title Companies Credit Unions Investors Lenders & Servicers National Credit Union Administration Profits Quarterly Earnings Service Providers 2013-03-04 Tory Barringer March 4, 2013 474 Views in Originationcenter_img Share Federally insured credit unions brought in record-high earnings last year, the “”National Credit Union Administration””: (NCUA) reported.[IMAGE]NCUA reported earnings of $8.5 billion across the industry in 2012, the highest annual figure ever posted. Earnings last year were 36.1 percent higher from the $6.3 billion reported in 2011.According to the administration, the rise in earnings came largely from reductions in loan loss reserves, “”a positive sign of improving economic conditions.”” Meanwhile, the industry’s return on average assets ratio–a measure of industry earnings–stayed constant at 86 basis points in last year’s fourth quarter.Membership in federal credit unions also grew, jumping from 91.8 million at the end of 2011 to 93.8 million at the end of 2012, an increase of 2.2 percent. The number of federally insured credit unions fell by 275 as the industry consolidated, closing the year at 6,819.At the end of fourth quarter, federal credit unions had an estimated $597.7 billion in outstanding loans, an increase [COLUMN_BREAK]of $6.6 billion (or just over 1.1 percent) quarter-over-quarter and $26.3 billion (or 4.6 percent) for the year. Lending for first mortgage loans increased 1.2 percent during the quarter and 5.7 percent for the year, reaching $246.3 billion.Credit unions’ total assets grew by $8.8 billion in the fourth quarter and $60.0 billion for all of 2012 to end the year at a little more than $1 trillion, NCUA reported. At the same time, industry net worth rose to $106.7 billion, up $2.2 billion for the quarter and $8.4 billion for the year. Net worth ratio, a measure of capital strength, was 10.44 percent, up 13 basis points quarter-over-quarter and 23 basis points year-over-year.As far as performance goes, NCUA noted growth was most robust in credit unions with assets of $250 million or more. This group–comprising 751 credit unions–showed the largest gains in almost every category, including membership, net worth, market share, loans, and assets. While smaller credit unions tended to have higher net worth, they showed slower growth; credit unions with assets under $10 million had a loss of overall membership and sluggish loan growth compared to those with assets greater than $250 million.””The composition of the credit union industry is changing, which presents challenges,”” said Debbie Matz, NCUA board chairman. “”Small credit unions are important to their members and their local economies. It’s our job to monitor their health and, to the extent possible, find ways to keep them sustainable.””While Matz added that “”[t]here are many reasons to be optimistic about the credit union industry’s future,”” she warned that fixed-rate mortgages make up a large share of assets as a result of today’s low interest rates and “”could pose a long-term risk for the industry.””last_img

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