Friday, February 22, 2013

Problem Credit Union Update, Q4 2012

NCUA reported that the number of problem credit unions fell during the fourth quarter and for all of 2012.

A problem credit union is defined as a credit union with a CAMEL 4 or 5 rating.

The number of problem credit unions fell by 40 during 2012 to 369 credit unions and by 13 during the fourth quarter.

There were:
  • 4 credit unions with $1 billion or more in assets on the problem CU list, down from 7 a year earlier;
  • 3 credit unions with between $500 million and $1 billion in assets, down from 4;
  • 25 credit unions with between $100 million and $500 millionin assets, down from 26;
  • 131 credit unions with between $10 million and $100 million in assets, down from 156; and
  • 206 credit unions with under $10 million in assets, up from 196.
In addition, the assets and shares (deposits) in problem credit unions declined during 2012.

Assets fell from $29.4 billion at the end of 2011 to $19 billion at the end of 2012. In other words, 1.8 percent of the industry's assets were in CAMEL 4 or 5 institutions.

Shares dropped from $26.3 billion to $16.9 billion over the same time period. At the end of 2012, 2.02 percent of all insured shares were in problem credit unions. This was down 80 basis points from the third quarter and 129 basis points from a year ago.


  1. Miraculous turnaround.
    A 30% improvement in camel 4-5 in one year and almost all of the improvement came in 4Q.
    Almost as if they all improved in time to allow for more funds to be taken from the reserve fund and VOILA, funds ARE removed from reserves.
    Almost as believable as AEAs miracle in the desert!
    Pass me some of that Colorado grass yer smokin!

  2. Perhaps a more common understanding would be that at the end of 3Q all Corp Stabilization funding happened and was expensed and thus in 4Q CU's cannot accrue nor expense any Corp Stabilization expenses for 2013 and were a touch more profitable during that period.

    1. Thats a stretch that's a bit touched!
      Pass me some of that Colorado grass, I say!



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