More credit unions opted into a new, streamlined framework for reporting their complex credit union leverage ratios in the second quarter.
A total of 406 credit unions opted into the framework in the second quarter, according to S&P Global Market Intelligence data, an increase of 21 institutions from the 385 that opted in during first quarter. The number of eligible credit unions grew by just four sequentially to 713.
The framework is one of several changes the National Credit Union Administration made to credit union call reports that went into effect March 31. Among a host of other alterations, the changes make it simpler for credit unions with more than $500 million in total assets to comply with capital adequacy requirements. Not all credit unions opted in or were able to meet some of the other requirements, including a net worth ratio of at least 9% and off-balance sheet exposures below or equal to 25% of their total assets.
In the second quarter, 147 credit unions were eligible but did not meet the 9% net worth ratio requirement, while 24 were eligible but did not meet the off-balance sheet exposure rule.
Largest credit unions in the framework
The makeup of the largest eligible credit unions that opted into the framework remained largely the same in the second quarter.
Of the 20 largest credit unions in the framework, the top three by total assets to opt in and qualify remained Vienna, Va.-based Navy FCU; Riverdale, Utah-based America First FCU; and Live Oak, Texas-based Randolph-Brooks FCU.
One of the top 20 credit unions that chose to opt out last quarter opted in this quarter: Bethpage, N.Y.-based Bethpage FCU.
Largest credit unions that did not opt into the framework
One of the top 20 credit unions that opted into the framework last quarter chose to opt out in the second quarter: Dublin, Calif.-based Patelco CU.
Otherwise, the list of the biggest credit unions not in the CCULR remained the same quarter over quarter.
The largest credit union in this group, Raleigh, N.C.-based State Employees CU, had assets of $53.13 billion and off-balance sheet exposures of 4.29%, but a net worth ratio of just 8.82%. The second-biggest, Tysons, Va.-based Pentagon Federal Credit Union, did not opt in despite having assets of $36.69 billion, a net worth ratio of 9.02% and off-balance sheet exposures totaling just 6.96% of total assets.
Grace period
Some credit unions opted into the framework but are in a two-quarter grace period because they failed to meet all of the qualifying requirements.
The largest credit union in this category was Anchorage, Alaska-based Alaska USA FCU with assets of $11.39 billion but a net worth ratio of 8.90%, followed by Bakersfield, Calif.-based Valley Strong CU, with assets of $4.01 billion and a net worth ratio of 8.40%. The third-largest credit union in the grace period was Suitland, Md.-based Andrews FCU, which had $2.45 billion in assets, but its off-balance sheet exposures exceeded the 25% asset limit at 25.1%.
