ALEXANDRIA, Va.–Updated numbers on the National Credit Union Share Insurance Fund show the percentage of insured deposits in CAMEL 1 and 2 credit unions is at its highest point in more than a decade.
In a presentation to the NCUA board during its monthly meeting, NCUA CFO Rendell Jones said the fund is in its best position in terms of troubled CUs since 2006.
Through Sept. 30, the number of CAMEL Code 4/5 credit unions remained relatively flat, with 200 such CUs as of the end of Q3 (down from 204 in June). The vast majority of CAMEL Code 4/5 CUs in terms of numbers remains in CUs below $10 million in assets, with 99. There are three credit unions with assets of $500 million or more representing $4.2 billion in insured shares rated as Code 4 or 5.
The number of CUs rated CAMEL Code 3 CUs has also continued to slowly decline, with 861 Code 3 CUs as of the end of the third quarter. Those CUs represent 3.16% of total insured shares.
Year to date $40.1 million has been spent by the insurance fund on failed CUs. That’s down considerably from 2018, when eight credit union failures (nearly all taxi medallion lending CUs) cost the NCUSIF nearly three quarters of a billion dollars in losses.
Asked by NCUA Board of Member J. Mark McWatters the reason for the number of troubled CUs—is it smaller CUs being merged or something else–Jones responded, “It’s a bit more complicated than that. These are snapshots in time of composites across the system. Changes are the result of mergers, failures, improvements, and it’s all of those reasons.”
Other Data Points
Other data points on the NCUSIF’s performance through Q3:
- For the quarter, the fund reported $24 million in net income and $119 million for the year.
- Overall, the NCUSIF held $16.7 billion in total assets at the end of Q3.
- The fund saw a nearly $50 million increase in the receivable from the Corporate Asset Management Estates due to improvements in the underlying assets.
- The fund paid $1.1 million for CU liquidations during the third quarter.
- The fund closed Q3 with a 1.33% equity ratio, down from 1.39% at year-end 2018.