NCUA Boardroom. (Photo: NCUA)
With only one item on the agenda, an update on the Share Insurance Fund, Thursday's NCUA board meeting wrapped up in a brisk 41 minutes.
During the November meeting, board members were briefed on the overall health of the Share Insurance Fund for the quarter ending on Sept. 30.
According to NCUA CFO Eugene Schied, the SIF reported a net income of $26.2 million, $20.2 billion in assets and total income for the third quarter of $73.7 million.
"The Share Insurance Fund performed well in the third quarter," NCUA Chairman Todd Harper said. "The changes in the interest rate environment over the last several months increased the income and earnings of the Fund."
Another positive was the SIF's equity ratio remained at 1.26% – the same level as December 2021. Earlier in the pandemic, the equity ratio dropped to 1.22%. The board would be required to develop a restoration plan if the ratio dropped to 1.20%. While the 1.26% was seen as a positive data point, it is still far below the normal operating level of 1.33%.
SIF's summary balance sheet as of Sept. 30, 2022 (Source: The NCUA). Other updates from Schied included:
- The number of composite CAMELS codes 4 and 5 credit unions increased 2.6% from the end of the second quarter, to 120 from 117. Assets for these credit unions increased 2.7% from the second quarter to $3.8 billion from $3.7 billion.
- The number of composite CAMELS code 3 credit unions increased 1.7% from the end of the second quarter, to 768 from 755. Assets for these credit unions increased 7.6% from the second quarter to $47.9 billion from $44.5 billion.
"Unfortunately, the Share Insurance Fund report this quarter also shows another side of rising interest rates with an increase in the number of credit unions with a composite CAMELS code 3, 4 or 5 rating," Harper said. "Additionally, several credit unions have experienced liquidity issues recently, including some with more than $1 billion in assets. And, with ongoing inflationary pressures and continued interest rate increases likely, the potential for headwinds slowing the economy and increasing stress on households and financial institutions continues to grow.
"The NCUA board will continue to monitor trends and developments in the economy, financial markets and credit unions. If any issues arise, the board will also be ready to take action to protect credit union members and the Share Insurance Fund."
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Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
