Another Opportunity to Improve Portfolio Yield for Credit Unions
The NCUA Board approved a $160.1 million equity distribution from the Share Insurance Fund that will be paid to eligible credit unions in the second quarter of 2019, providing another one-time income item that federally insured credit unions can use to improve their portfolio yield. Any credit union that filed a quarterly Call Report as a federally insured credit union for at least one reporting period in calendar year 2018 will be eligible for a pro rata distribution. As a preliminary estimate, eligible credit unions may be able to expect to receive approximately $18,500 per $100 million of average insured shares. For accounting and call report purposes, we assume the NCUA’s recommended treatment of the 2018 equity distribution will be appropriate for the 2019 distribution. The NCUA recommended that the distribution be booked as “Other Operating Income” and reported on line item 14 on the Statement of Income and Expense – Other Operating Income. Some credit unions may choose to record this income item in 1Q 2019 since it has been announced or they may wait until actual receipt of the distribution in 2Q 2019.