Northwest Credit Unions See High Return on Average Assets in Q1 2020

7/21/2020Growth Main

According to data released by the National Credit Union Administration, Idaho, Oregon, and Washington saw strong numbers in the first quarter of 2020 and outperformed credit unions across the nation in almost every metric.

Northwest credit unions really shined in their Return on Average Assets, where Oregon ranked first in the nation with 69 basis points (bps), Idaho second with 66 bps, and Washington fifth with 59 bps. These numbers were 18 to 25 basis points higher than the national average.

Nationwide, credit union member delinquency remained low, at 59 bps, but in the Northwest, delinquency was even lower, at 20 to 27 bps below the national average. 

“Northwest credit unions have reported that they are increasing provisions for loan losses,” said John Trull, VP, Regulatory Advocacy at the Northwest Credit Union Association. “However, as long as underlying asset values remain stable, they are not anticipating significant increases in loan losses.”

Loan and deposit growth also increased in the Northwest, particularly in Idaho, which was the only state in the nation where both deposit and loan growth have increased over 6%, year over year.

“As second quarter numbers come in, we are expecting loan growth to have slowed significantly — particularly in auto lending. We are also anticipating significant increases in deposits relative to loan demand, which will be reflected in a lower aggregate net worth ratio.”  
— John Trull, VP, Regulatory Advocacy, NWCUA

Overall, Northwest credit unions remain stable and healthy, with nearly all of them reporting positive income. While financial institutions across the country are facing uncertainty, compressed interest margins, and low investment yields, there are opportunities for healthy spreads, particularly on mortgages where the low cost of funds is allowing credit unions to maintain earnings while hedging long-term risks. 

With healthy balance sheets, credit unions are open and ready to help members navigate challenging times with low cost loans and higher interest on savings.  

Here’s how Northwest credit unions closed out Q1 2020:

Median Annual Asset Growth
Idaho: 7% (second highest nationwide)
Oregon: 5% 
Washington: 5.8%

Median Annual Share and Deposit Growth  
Idaho: 6.6% (fifth highest nationwide)
Oregon: 4.3% 
Washington: 5.8%

Median Annual Membership Growth
Idaho: 2% (second highest nationwide)
Oregon: -.2%
Washington: 1.2%

Median Annual Loan Growth
Idaho: 6.1% (second highest nationwide)
Oregon: 3.5% 
Washington: 3.6% 

Median Total Delinquency Rate 
Idaho: 39 bps 
Oregon: 32 bps (second lowest nationwide)
Washington: 34 bps (fourth lowest nationwide) 

Median Loan-to-Share Ratio 
Idaho: 86%, (third highest nationwide) 
Oregon: 80% 
Washington: 79%

Median Return on Average Assets
Idaho: 66 bps (second highest nationwide)
Oregon: 69 bps (highest nationwide)
Washington: 59 bps (fifth highest nationwide)

Positive Net Income
Idaho: 93% (second highest nationwide)
Oregon: 93% (second highest nationwide) 
Washington: 90%

View data from Q4 2019 online here. 

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Posted in NCUA.