Credit unions see asset growth in fourth quarter

Total assets in federally insured credit unions rose by $88 billion, or 4.1 percent, to $2.26 trillion in the fourth quarter of 2023, according to the National Credit Union Administration (NCUA).

Among the key findings, the NCUA revealed that insured shares and deposits grew $37 billion, or 2.2 percent, to $1.72 trillion in the quarter, while total loans outstanding increased $96.2 billion, or 6.4 percent, to $1.60 trillion.

“The credit union system remains largely stable in its performance and remains resilient against a challenging interest rate and economic environment,” NCUA Chairman Todd Harper said. “However, the NCUA continues to see signs of financial strain on credit union balance sheets, along with growing consumer financial stress as reflected in the rising delinquency rate shown in the latest data. Credit union executives, administrators, and boards of directors must remain diligent in managing the safety-and-soundness and consumer financial protection risks within their institutions. Today’s marketplace requires active — not passive — management by all.”

Other highlights from the report found that:

• The delinquency rate at federally insured credit unions was 83 basis points in the fourth quarter of 2023, up 21 basis points from one year earlier.
• The average outstanding loan balance in the fourth quarter of 2023 was $17,922, up $778, or 4.5 percent, from one year earlier.t
• The system’s net worth increased by $8.7 billion, or 3.8 percent, to $24.5 billion.
• The return on average assets for federally insured credit unions was 69 basis points in 2023, down from 88 basis points in 2022. The median return on average assets across all federally insured credit unions was 60 basis points, up 10 basis points from a year earlier.
• Net income for federally insured credit unions in 2023 totaled $15.2 billion, down $3.5 billion, or 18.8 percent, from 2022. Interest income rose $26.6 billion, or 37.3 percent, over the year to $98.1 billion. Non-interest income rose $1.2 billion, or 4.9 percent, to $25.0 billion, largely reflecting an increase in other non-interest income.
• The delinquency rate on non-commercial real estate loans was 56 basis points in the fourth quarter of 2023, 13 basis points higher than in the fourth quarter of 2022. The credit card delinquency rate rose to 211 basis points from 148 basis points one year earlier. The auto loan delinquency rate increased 23 basis points over the year to 90 basis points in the fourth quarter of 2023.
• The net charge-off ratio was 61 basis points, up 27 basis points compared with the fourth quarter of 2022.
• Total shares and deposits rose by $31.2 billion, or 1.7 percent, over the year to $1.88 trillion in the fourth quarter of 2023.

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