ALEXANDRIA, Va.–The National Credit Union Share Insurance Fund (NCUSIF) reported $12.1 million in net income during the third quarter, bringing the fund’s net income since Jan. 1 to $14.3 million.
The fund showed $57.1 million in total income and $45 million in total expenses during the quarter. Operating expenses during the quarter were $2.2 million more than had been estimated. The update was provided by the agency’s CFO, Rendell Jones, during the November meeting of the NCUA board.
Jones said the agency continues to reduce reserves for projected loan losses.
Overall, the NCUSIF has $13.3 billion in assets, of which $12.8 billion is invested in Treasuries.
As of Sept. 30, Jones reported that the number of CAMEL Code 4 and 5 credit unions was reduced by eight to 201. Ninety percent of those CUs have less than $100 million in assets, and represent total assets of $8.6 billion or .86% of all insured shares. During the third quarter, there was an increase in the number of CAMEL 4s and 5s in the $100 million to $500 million asset category, a decrease in sub-$100 million category, and no change in the $500 million or larger category.
Jones said that during the third quarter there were 1,164 CUs rated as CAMEL 3, with 1% of those having more than $500 million in total shares. Total shares in CAMEL 3 CUs were $79.1 billion, a 3.7% increase over Q2.
During Q3 there were 12 CU failures, 10 of which were liquidations and two of which were assisted mergers. The cost of those failures year-to-date to the NCUSIF has been $8.5 million. Jones said there were 16 failures during all of 2015 at a cost of $14.8 million.
Those failures were nearly all due to fraud, which has been an issue raised frequently by NCUA Board Member Mark McWatters.
“Fraud continues to be the leader of the pack,” said McWatters after Jones completed his presentation. “We have lots of regulations on the books, but our losses continue to be from fraud.”