ALEXANDRIA, Va. - NCUA's 2005 Annual Report showed the agency making gains in revenues, net income, and the insurance fund's equity ratio but CAMEL 4/5 credit unions continue to grow.

NCUA's operating fee revenue was up to $62 million in 2005 over $50.7 million in 2004; total revenues came to $63.5 million for 2005 as opposed to $51.4 million the previous year. Expenses were up a bit from $133.5 million to $138.3 million between 2004 and 2005. However, net income at the same time was up from $2.3 million to $4.0 million.

The NCUSIF equity ratio crept upward from 1.27% in 2004 to 1.28% in 2005. In the same period federally insured credit unions' insured shares grew from $499.0 billion to $515.6 billion. Credit unions net worth was up from 11.0% to 11.2% and the loan to share ratio expanded from 74.5% to 79.4%. Still, federally insured credit unions' net income sagged from 0.92% to 0.85%.

"For 2006, we remain focused on strong performance budgeting and financial internal controls to carry out our mission to serve and to be accountable to the American public," NCUA Chief Financial Officer Dennis Winans stated in the report. Deloitte & Touche gave NCUA an "unqualified" opinion that there were "no material weaknesses," he noted.

While accounting was not a problem for the agency, the number of troubled credit unions keeps increasing. At the start of this millennium, the number of CAMEL 4 credit unions rose slowly then jumped from 217 in 2003 to 255 in 2004. By 2005, the number reached 280 problem credit unions. There were no CAMEL 5 credit unions reported at year-end.

The percentage of insured shares these credit unions represent has also increased from 0.8% in 2004 to 1.1% last year. On the flip side, the number of CAMEL 1 and 2 credit unions has also increased from 91.9% of insured shares to 93.6%. CAMEL 3s are down from 7.3% to 5.3% year over year. -scooke@cutimes.com

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NCUA Financials Make a Strong Showing in 2005, Problem CUs Still a Problem

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