ALEXANDRIA, Va.–Responding to the economic downturn, NCUA increased the NCUSIF’s general reserve fund for covering CU losses by $60.98 million to $177.7 million at the end of the first quarter.
NCUA’s acting CFO, Eugene Schied, said the agency is acting cautiously in remarks given during the NCUA board meeting, which was conducted virtually.
Schied said the increase in general reserves was not due to any particular credit union, saying it’s a combination of specific reserves related to information about a particular credit union and the general reserve based on economic modeling, which provides a range of potential losses.
In delivering the quarterly update on the NCUSIF, Schied said the fund closed 2019 a 1.35% equity ratio.
The NCUSIF during Q1 reported $1.2 million of net income on total income of $77 million. The balance sheet reflects a decrease in the loss expense for natural-person credit unions of $20.9 million and $12.6 million for corporate CUs.
As of March 31, the NCUSIF had $17.686 billion in total assets up from $16.7 billion at year-end 2019.
Other data points shared:
- As of March 31, there were 175 CAMEL Code 4-5 CUs, down from 190 at year-end
- As of March 31, there were 812 CUs were CAMEL 3, CUs, down from 838 at the end of 2019
- There are 4,219 CUs that are CAMEL 1-2.
- The CAMEL 4-5 CUs represent .77% of all insured shares
- Total shares in CAMEL Code 3 CUs are 2.99% of all insured shares
“We are on pretty solid footing,” said NCUA Chairman Rodney Hood.
Added NCUA Board Member J. Mark McWatters, “We look at this today and it looks generally favorable, generally rosy. But we can’t make the mistake of saying just because something looks good today that it’s going to look good tomorrow and the day after that. In a lot of respects we just don’t know. When I look at forbearance and decreases in servicing income, we’re really not going to understand the effect of COVID-19 on the credit union community until the fourth quarter of 2020 or the first quarter of 2021. We need to remain vigilant and be honest with ourselves that maybe we don’t know what the future holds for the share insurance fund and the credit union community. Life is not a snapshot.”