ALEXANDRIA, Va. — Because of the credit union system’s improved financial health, the NCUA is lowering the NCUSIF’s reserve balance from $1.2 billion to $871 million, NCUA CFO Mary Ann Woodson told the agency’s board on Thursday.

The lower reserve will raise the fund’s equity ratio and this could result in lower assessments next year.

Woodson said the fund’s equity ratio was 1.32% at the end of October. It had been 1.31% for the three previous months.

The fund’s income was $136.9 million in September and has been $367.6 million in total so far this year. When the agency prepared the budget last year, during a much more difficult economic climate, the fund was projected to lose $465 million during the first nine months of 2011, Woodson said.

There have been 13 credit union failures this year, compared with 28 for all of 2010.

At the end of October, 3.89% of insured shares were in CAMEL 4 and 5 credit unions, compared with 3.88% at the end of September and 5.13% at the end of last year.

As of October 31, 15.87% of insured shares were in CAMEL 3 credit unions, compared with 16.59% at the end of August and 18.26% at the end of last year, Woodson said.