ALEXANDRIA, Va. – NCUA Chief Financial Officer Dennis Winans said during his presentation of the quarterly insurance fund report that the NCUSIF's net income for 2006 will likely double from last year.
He projected that the NCUSIF's net income would reach $145 million this year, far better than the fund has performed since 2002. "This is primarily due to the increase in short-term interest rates," he explained.
While gross income was less than budgeted for, the savings in the operating and insurance loss expenses produced a net income for the first half of 2006 of $78.6 million, above the budgeted $72.2 million. Winans also said he expects the gross income to catch up to the projections as the year progresses.
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The fund equity ratio is expected to end the year at 1.29%. The NCUA Board has the ability to provide credit unions dividend payments if the level exceeds 1.30%. Additionally the percentage of insured shares in CAMEL 4/5 credit unions has lowered since year-end 2005 from 1.12% to 1.01%. One hundred seven credit unions left the CAMEL 4/5 category: 59 raised their CAMEL rating and another 48 were merged or liquidated. So far, only 10 troubled credit unions have been liquidated costing the fund $1.3 million. In comparison, last year 15 credit unions failed at a cost of $16.2 million.
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