Number of CAMELS 4 & 5 Credit Unions Increase in Third Quarter
While the National Credit Union Share Insurance Fund remains healthy, the number of troubled credit unions is rising, according to the NCUA Board meeting reports today.
“Overall, the Share Insurance Fund’s performance in the third quarter of 2024 was strong. Yet, we continue to find ourselves in a good news, bad news scenario,” Chairman Harper said. “Since December 2022 until today, the fund has experienced a nearly $1 billion increase. This change resulted in the fund’s total assets reaching nearly $22.6 billion. Adding to the financial strength of the fund, quarterly investment income has risen a healthy $12 million since the first quarter of 2024.”
Read about the CLF budget also discussed at the board meeting here.
Of greatest concern for me has been the large number of troubled CAMELS code 4 and 5 credit unions, especially the nine troubled complex credit unions with more than $500 million in assets. -NCUA Chairman Todd Harper
The NCUA Chief Financial Officer briefed the NCUA Board on the performance of the Share Insurance Fund for the quarter ending on Sept. 30, 2024. The Share Insurance Fund reported a net income of $72.2 million for the third quarter of 2024, $22.6 billion in assets, and $145.8 million in total income for the third quarter of 2024.
Harper continued, “We continue to see signs of financial strain on credit union balance sheets and consumer financial stress. And, we’re seeing this play out in the number of credit unions and the percentage of assets held by composite CAMELS code 3, 4 and 5 credit unions. Of greatest concern for me has been the large number of troubled CAMELS code 4 and 5 credit unions, especially the nine troubled complex credit unions with more than $500 million in assets. These conditions are another reason why our supervision of these and all federally insured credit unions must remain risk-focused. They also highlight the need for the NCUA’s examiners to be ready to act expeditiously when identifying problems.”
Additionally, for the third quarter of 2024:The number of composite CAMELS code 3 credit unions decreased in second quarter from 743 to 730 at the end of the third quarter. Assets for these credit unions decreased from the second quarter to $189.8 billion from $191.1 billion.
The number of composite CAMELS codes 4 and 5 credit unions increased in second quarter from 136 to 138 at the end of the third quarter. Assets for these credit unions decreased from $19.6 billion to $19.1 billion.
As of the end of the third quarter of 2024, two federally insured credit union failures cost the Share Insurance Fund approximately $2 million in losses.
The third quarter figures are preliminary and unaudited. Additional information on the performance of the Share Insurance Fund is available on the NCUA’s website.
View NCUA’s full NCUSIF and CAMELS aggregate report here.
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