Quarterly Credit Union Data Summary 2020 Q3

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National Credit Union AdministrationQuarterly Credit UnionData Summary2020 Q3

Credit Union System Performance Data: 2020Q3The Quarterly Credit Union Data Summary provides an overview of the financial performance of federally insuredcredit unions based on information reported by those credit unions to the National Credit Union Administration inthe 2020Q3 Call Report. As of September 30, 2020, there were 5,133 federally insured credit unions with 123.7 millionmembers.Please direct inquiries about the quarterly performance report to oeacmail@ncua.gov.Selected Performance Indicators Total assets in federally insured credit unions rose by 248 billion, or 16.1 percent, over the year ending inthe third quarter of 2020, to 1.79 trillion. Total loans outstanding increased 69 billion, or 6.3 percent, over the year to 1.2 trillion. The averageoutstanding loan balance in the third quarter of 2020 was 16,293, up 767, or 4.9 percent, from one yearearlier. The delinquency rate at federally insured credit unions was 55 basis points in the third quarter of 2020,down 11 basis points from one year earlier. The net charge-off ratio was 48 basis points, down from 55basis points in the third quarter of 2019. Insured shares and deposits rose 213 billion, or 17.7 percent, over the year ending in the third quarter of2020, to 1.4 trillion. The loan-to-share ratio stood at 75.6 percent in the third quarter of 2020, down from 84.1 percent in thethird quarter of 2019. The credit union system’s net worth ratio was 10.43 percent in the third quarter of 2020, compared with11.38 percent one year earlier. Net income totaled 11.0 billion at an annual rate in the third quarter of 2020, down 3.7 billion, or25.1 percent, from the same period a year ago. The decline was due primarily to a jump in provisioning forloan and lease losses or credit loss expenses. The net interest margin for federally insured credit unions was 48.1 billion in the third quarter of 2020,or 2.87 percent of average assets. That compares with 47.7 billion, or 3.19 percent of average assets, in thethird quarter of 2019. The return on average assets for federally insured credit unions was 66 basis points in the third quarter of2020, down from 98 basis points in the third quarter of 2019. The median return on average assets acrossall federally insured credit unions was 42 basis points, down 23 basis points from the third quarter of 2019. The number of federally insured credit unions declined to 5,133 in the third quarter of 2020, from 5,281in the third quarter of 2019. In the third quarter of 2020, there were 3,213 federal credit unions and 1,920federally insured, state-chartered credit unions. The year-over-year decline is consistent with long-runningindustry consolidation trends. The number of credit unions with a low-income designation rose to 2,640 in the third quarter of 2020from 2,615 one year earlier. Federally insured credit unions added 4.2 million members over the year, and credit union membership inthese institutions reached 123.7 million in the third quarter of 2020.i

Balance Sheet DetailsAssets Total assets in federally insured credit unions rose by 248 billion, or 16.1 percent, over the year to 1.79 trillion in the third quarter of 2020. Cash and equivalents (assets with maturity of three months or less) increased 93.3 billion, or80.6 percent, to 209.1 billion. Total investments (instruments with maturities in excess of three months) rose 75.6 billion, or29.0 percent, to 336.6 billion. Total loans outstanding increased 69 billion, or 6.3 percent, over the year, to 1.2 trillion. Credit unionloan balances rose in most major categories, compared with the second quarter of 2019. Loans secured by 1- to 4-family residential properties increased 42.1 billion, or 9.0 percent, to 508.8 billion in the third quarter of 2020.Auto loans increased 4.6 billion, or 1.2 percent, to 378.8 billion. Used auto loans rose 10.1 billion, or4.4 percent, to 237.0 billion, while new auto loans fell 5.5 billion, or 3.7 percent, to 141.9 billion.Credit card balances declined 3.1 billion, or 4.9 percent, to 60.7 billion.Non-federally guaranteed student loans rose 0.5 billion, or 9.1 percent, to 6.0 billion.Commercial loans, excluding unfunded commitments, increased 13.1 billion, or 16.8 percent, overthe year to 91.3 billion in the third quarter of 2020. Commercial loans are not directly comparable tomember business loans.The delinquency rate at federally insured credit unions was 55 basis points in the third quarter of 2020,down 11 basis points compared with the third quarter of 2019. Loan performance improved in most majorcategories: Investments with maturities less than or equal to one year rose 19.3 billion, or 24.5 percent, to 97.9 billion.Investments with maturities of one to three years rose 22.2 billion, or 23.8 percent, to 115.6 billion.Investments with maturities of three to five years increased 12.9 billion, or 24.0 percent, to 66.5 billion.Investments with maturities of five to 10 years rose 14.9 billion, or 49.8 percent, to 44.7 billion.Investments with maturities greater than 10 years increased 6.4 billion, or 116.4 percent, to 11.8 billion.The delinquency rate on fixed-rate real estate loans was 40 basis points in the third quarter, down 4basis points compared with the third quarter of 2019.The credit card delinquency rate fell to 87 basis points from 132 basis points one year earlier.For auto loans, the delinquency rate declined 14 basis point to 44 basis points in the third quarter of2020.The delinquency rate for commercial loans, excluding unfunded commitments, was 76 basis pointsin the third quarter of 2020, compared with 70 basis points in the third quarter of 2019.The net charge-off ratio for all federally insured credit unions was 48 basis points in the third quarter of2020, compared with 55 basis points in the third quarter of 2019.Liabilities and Net Worth Credit union shares and deposits rose by 236.4 billion, or 18.3 percent, over the year to 1.53 trillion inthe third quarter of 2020. Regular shares increased 100.7 billion, or 22.7 percent, to 543.8 billion. Otherdeposits increased 68.1 billion, or 10.5 percent, to 717.0 billion, led by money market accounts, whichwere up 55.5 billion, or 20.8 percent. The credit union system’s net worth increased by 11.3 billion, or 6.5 percent, over the year to 186.5billion. The aggregate net worth ratio — net worth as a percentage of assets — stood at 10.43 percent inthe third quarter of 2020, down from 11.38 percent one year earlier.ii

Income Statement Details Net income for federally insured credit unions in the third quarter of 2020 totaled 11.0 billion at an annualrate, down 3.7 billion, or 25.1 percent, from the third quarter of 2019. Interest income declined 0.3billion, or 0.5 percent, over the year to 60.5 billion, while non-interest income increased 2.0 billion, or9.3 percent, to 23.0 billion. Interest expense totaled 12.4 billion annualized in the third quarter of 2020, down 0.7 billion, or5.0 percent, from one year earlier. Non-interest expenses grew 2.9 billion, or 6.2 percent, over the yearto 50.7 billion in the third quarter. Rising labor expenses, which were up 2.0 billion, or 8.2 percent,accounted for over two-thirds of the increase in non-interest expenses. The aggregate net interest margin widened by 0.4 billion, or 0.7 percent, over the year to 48.1 billion atan annual rate in the third quarter of 2020. The credit union system’s provision for loan and lease losses or credit loss expense rose 3.0 billion, or47.6 percent, over the year, to 9.4 billion at an annual rate in the third quarter of 2020.Performance by Asset CategoryConsistent with long-running trends, credit unions with assets of at least 1 billion reported the strongest growth inloans, membership, and net worth over the year ending in the third quarter of 2020. The number of federally insured credit unions with assets of at least 1 billion increased to 364 inthe third quarter of 2020 from 319 in the third quarter of 2019. These 364 credit unions held 1.3 trillionin assets, or 71 percent of total system assets. Credit unions in this category reported loan growth of 11.8percent. Membership rose 10.6 percent. Net worth increased 11.9 percent. The number of federally insured credit unions with assets of at least 500 million but less than 1billion rose to 272 in the third quarter of 2020 from 255 in the third quarter of 2019. These 272 creditunions held 191.0 billion in total assets, or 11 percent of total system assets. Credit unions in this categoryreported a 1.9 percent decline in total loans outstanding over the year. Membership fell 4.5 percent, andnet worth decreased 2.8 percent. The number of federally insured credit unions with at least 100 million but less than 500 million inassets increased to 1,063 in the third quarter of 2020 from 1,012 in the third quarter of 2019. These 1,063credit unions held 235.9 billion in total assets, or 13 percent of total system assets. Credit unions in thiscategory reported a 6.1 percent decline in total loans outstanding. Membership fell 6.5 percent. Net worthfell 3.5 percent. The number of federally insured credit unions with at least 50 million but less than 100 million inassets declined to 674 in the third quarter of 2020 from 682 in the third quarter of 2019. These 674 creditunions held 48.4 billion in total assets, or 3 percent of total system assets. Credit unions in this categoryreported a 12.2 percent decrease in total loans. Membership fell 12.5 percent. Net worth declined 7.1percent. The number of federally insured credit unions with assets of at least 10 million but less than 50million declined to 1,561 in the third quarter of 2020 from 1,661 in the third quarter of 2019. These creditunions held 40.1 billion in assets, or 2 percent of total system assets. Credit unions in this categoryreported a 15.8 percent decrease in loans. Membership declined 13.5 percent. Net worth fell 10.4 percent. The number of federally insured credit unions with less than 10 million in assets declined to 1,199in the third quarter of 2020 from 1,352 in the third quarter of 2019. These credit unions held 5.0 billion inassets, or 0.3 percent of total system assets. Credit unions in this category reported a 21.3 percent decline inloans. Membership fell 16.4 percent. Net worth declined 14.1 percent.iii

Notes to UsersChanges to Quarterly Credit Union Data SummaryBeginning in 2020Q2, the net worth ratio formula was modified to reflect changes in the Call Report. The new formulais as follows:Net Worth (acct 997) divided by Total Assets excluding Small Business Administration Paycheck ProtectionProgram (PPP) loans pledged as collateral to the Federal Reserve Board’s PPP Lending Facility (acctnw0010) multiplied by 100Prior to 2020Q2, the net worth ratio was calculated as follows:Net Worth (acct 997) divided by Total Assets (acct 010) multiplied by 100Previous Changes:One change was made to the income statement tables in the Credit Union Data Summary with the release of the2020Q1 Call Report:Due to the implementation of the new accounting standard outlined below (Financial Instruments – Overall(Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities), the variableinterest income on securities held in a trading account was redefined and is now unrealized gain (loss) dueto change in fair value of equity and trading debt securities.Two changes were made to the income statement tables in the Credit Union Data Summary with the release of the2019Q1 Call Report:(1) A new variable, interest income on securities held in a trading account, was added to the total interest incomesection.The Financial Accounting Standards Board (FASB) on Jan. 5, 2016, issued a new Accounting StandardsUpdate (ASU), Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of FinancialAssets and Financial Liabilities. The new standard addresses certain aspects of recognition, measurement,presentation, and disclosure of financial instruments. The main objective in developing this new ASU is toenhance the reporting model for financial instruments to provide users of financial statements with moreuseful information.This ASU affects all reporting organizations, whether public or private, that hold financial assets or owefinancial liabilities. For all nonpublic organizations, including not-for-profit organizations and employeebenefit plans, the ASU is effective for fiscal years beginning after Dec. 15, 2018, and interim periods withinfiscal years beginning after Dec. 15, 2019.For additional information on this new accounting standard see:FASB Accounting Standards Update No. 2016-1: Financial Instruments – Overall (Subtopic 825-10),Recognition and Measurement of Financial Assets and Financial Liabilities, January 2016https://www.fasb.org/jsp/FASB/Document C/DocumentPage?cid 1176167762170&acceptedDisclaimer trueFASB In Focus: Accounting Standards Update, Financial Instruments—Overall (Subtopic 825-10): Recognitionand Measurement of Financial Assets and Financial Liabilities, January 5, 2016https://www.fasb.org/cs/ContentServer?c Document C&cid 1176167762630&d &pagename FASB%2FDocument C%2FDocumentPage(2) The provision for loan and lease losses variable was expanded to include credit loss expense and is now calledprovision for loan and lease losses or credit loss expense.This change stems from a new accounting standard issued by the Financial Accounting Standards Board(FASB), Accounting Standards Update (ASU) No. 2016-13, Topic 326, Financial Instruments – Credit Losses, oniv

June 16, 2016. The new accounting standard introduces the current expected credit losses methodology(CECL) for estimating allowances for credit losses. The new standard applies to all banks, savingsassociations, credit unions, and financial institution holding

The Quarterly Credit Union Data Summary provides an overview of the financial performance of federally insured . credit unions based on information reported by those credit unions to the National Credit Union Administration in the 2020Q3 Call Report. As of September 30, 2020, there were 5,133 federally insured credit unions with 123.7 million .

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