The NCUA board held its fourth scheduled open meeting of 2013 late last week. The board received updates on the performance of the National Credit Union Share Insurance Fund (NCUSIF) and the Temporary Corporate Credit Union Stabilization Fund (Stabilization Fund) for the first quarter of 2013.
“The Share Insurance Fund and the Stabilization Fund reflect an improving economy, a resilient credit union industry, continued prudent financial management, and common-sense regulation,” NCUA Board Chairman Debbie Matz said. “Assets at risk in credit unions with CAMEL codes 3, 4 and 5 have dropped for 10 straight quarters and with that, so has our level of exposure to potential losses. While we cannot predict the future with certainty, the growing strength of credit unions as a whole is a very positive sign.”
At the end of March 2013, credit unions with CAMEL codes 3, 4 and 5 held 12.6 percent of the industry’s assets—down significantly from the high of 21.9 percent at year-end 2010. The NCUA’s Share Insurance Fund ended the first quarter of 2013 with net income of $9.4 million and an equity ratio of 1.31 percent, exceeding the statutory normal operating level of 1.30 percent. The equity ratio is calculated on the year-end 2012 insured base of $839 billion. For the first quarter, investment and other income was $50.7 million, operating expenses were $32.3 million, and insurance loss expenses were $9.0 million, respectively.
Also for the first quarter, the Chief Financial Officer reported:
The number of CAMEL code 4 and 5 credit unions dropped 8.1 percent to 339. More than half were credit unions with less than $10 million in assets
Assets of the CAMEL code 4 and 5 credit unions fell 11.6 percent, to $16.8 billion from $19.0 billion at the end of 2012
The number of CAMEL code 3 credit unions dropped to 1,558 during the quarter from 1,571 at the end of 2012. Approximately half were credit unions with assets less than $10 million
Assets of the CAMEL code 3 credit unions fell by 4.1 percent, to $114.4 billion from $119.3 billion at the end of 2012
Four federally insured credit unions failed in the first quarter of 2013. The total amount of losses associated with these failures is $75,000. The reserve balance for the Share Insurance Fund was reduced from $412.5 million to $330.4 million during the first quarter.
The CFO also reported that the Stabilization Fund’s overall financial condition remains consistent with year-end 2012. The Stabilization Fund had $5.1 billion in outstanding borrowings with the U.S. Treasury on March 31, 2013. The total net position of the Stabilization Fund was a deficit of $3.5 billion, a slight improvement from year-end based on net income of $14.4 million in the first quarter.
The March 31, 2013, financial statements for the Share Insurance Fund and the Stabilization Fund are preliminary and unaudited.