How the Share Insurance Fund performed in Q3

The Share Insurance Fund reported a net income of $26.2 million, $20.2 billion in assets, and $73.7 million in total income for the third quarter of 2022, according to the NCUA.

“The Share Insurance Fund performed well in the third quarter,” said Todd Harper, NCUA chairman, during the Nov. 17 NCUA board of directors meeting. “The changes in the interest rate environment over the last several months increased the income and earnings of the Fund.”

The equity ratio for the Fund remains at 1.26.% and is updated on a semi-annual basis. As of June 30, 2022, the equity ratio was 1.26%, which remained the same from December 2021, and was calculated using an insured share base of $1.69 trillion on June 30, 2022, according to the NCUA.

The NCUA also reported for the third quarter of 2022:

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.

Harper said that 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. “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 board will continue to monitor trends and developments in the economy, financial markets and credit unions, and if any issues arise, will be ready to take action to protect credit union members and the Share Insurance Fund, according to the NCUA.

The next board of directors meeting is at 10 a.m. on Dec. 15 and can be livestreamed at ncua.gov.