Oct. 19, 2012 – NCUA staff said Thursday that the agency expects the National Credit Union Share Insurance Fund equity ratio to end the year at 1.3 percent after transferring any excess to the Temporary Corporate Credit Union Stabilization Fund.
At NCUA’s open board meeting Thursday, Mary Ann Woodson, NCUA’s chief financial officer, said the NCUSIF ended September with an equity-to-insured-share ratio of 1.32 percent. Woodson said this ratio is based on an insured-share base of $834.26 billion as of Sept. 30, up 4.9 percent from 2011. The NCUSIF investment balance as of Dec. 31 was $11.9 billion.
During the third quarter, the fund reduced its provision for credit union losses by $147.2 million; it now stands at $485 million. Through September, there have been 16 failures (nine involuntary liquidations and seven assisted mergers), costing the fund $95.7 million. The reserve balance has fallen $606 million from Dec. 31.
Through September, the number of problem credit unions with a CAMEL code of 4 or 5 was 382, down from the 409 reported at the end of last year. NCUA reports that seven of this year’s problem credit unions have assets over $1 billion. The total insured shares of all problem credit unions with a CAMEL code of 4 or 5 through September was $23.5 billion, down $3.3 billion from last year.
The total assets of the TCCUSF stand at roughly $1.75 billion through September, which includes $776.5 million from special premium assessments and $480.75 million from asset management estates.
Late last year, the NCUSIF had a surplus of $278.6 million that was transferred to the TCCUSF. Around that time, NAFCU pressed the agency to reevaluate its loss reserves in light of the improving economy and stronger financial performance of the credit union industry. In March, NCUA heeded NAFCU’s call by announcing it will reevaluate its reserving policy for the NCUSIF within the year.
NAFCU continues to press the agency to consider ways to further reduce future corporate stabilization assessments on credit unions.