Thursday, November 15, 2018

Problem CUs Fell During Q3 2018, NCUSIF Liquidation Charges of $743.4 Million

The number of problem credit unions fell during the third quarter of 2018, according to the National Credit Union Administration (NCUA).

At the end of the third quarter of 2018, there were 203 problem credit unions. In comparison, there were 210 problem credit unions at the end of the second quarter of 2018.

A problem credit union has a composite CAMEL rating of 4 or 5.

Total assets and shares (deposits) in problem credit unions fell during the third quarter. Assets in problem credit unions were $11.5 billion at the end of the third quarter compared to $12.9 billion at the end of the second quarter of 2018. Shares in problem credit unions were $10.4 billion as of September 2018 versus $11.8 billion as of June 30, 2018.

NCUA reported that 88 percent of problem credit unions have less than $100 million in assets, while almost 1.5 percent have more than $500 million in assets.

At the end of the third quarter, 0.91 percent of total insured shares were in problem credit unions. As of June 2018, 1.04 percent of total insured shares were in problem credit unions.

In addition, NCUA reported $743.4 million in liquidation charges to the National Credit Union Share Insurance Fund (NCUSIF) due to credit union failures during the third quarter. NCUSIF recaptured $57.4 million in reserves during the third quarter. As a result of the liquidation charge and recapture of reserves, NCUSIF reserve balance was $156.2 million at the end of the third quarter, down from $957 million as of the beginning of the third quarter.
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