40 credit unions undercapitalized at end of Q3

Forty credit unions were undercapitalized at the end of September, down from 43 in June, as the industry's median net worth ratio rose 11 basis points to 10.78%, according to S&P Global Market Intelligence data.

Critically undercapitalized credit unions

Of the three credit unions that reported a net worth ratio below 2.00% as of Sept. 30, two are no longer operating independently.

On Sept. 30, the National Credit Union Administration liquidated Paducah, Ky.-based Paducah Teachers FCU, with C-Plant FCU purchasing some of the credit union's assets and assuming most of its share accounts. Meanwhile, Oxford, Ohio-based First Miami University Student FCU has since merged with Miami University Community FCU.

New York-based St. Johns Buffalo FCU saw its net worth ratio drop to 1.63% at Sept. 30, down from 3.55% at the end of June and 5.83% at the end of September 2021. The credit union has lost money in each of the last four quarters.

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Significantly undercapitalized credit unions

Five credit unions reported net worth ratios between 2.00% and 4.00% at the end of September, including Hartville, Ohio-based Lake Community FCU and Kansas City, Mo.-based Bayer CU, which have since merged into Akron, Ohio-based Buckeye State CU Inc. and Lenexa, Kan.-based CommunityAmerica CU, respectively.

The other three credit unions — Richmond, Ind.-based Richmond City Employees FCU; Wilkes-Barre, Pa.-based VAntage Trust FCU; and Amityville, N.Y.-based Branch 6000 NALC CU — each saw their net worth ratios fall by at least 250 basis points quarter over quarter.

The Empire State home to over 25% of operating undercapitalized credit unions

New York once again led the country by a large margin with nine undercapitalized credit unions and was the only state with two operating credit unions with net worth ratios below 4%.

* Net worth calculations for a credit union can be found on an institution's company page in the left-hand menu's "Financials" section under Credit Union (5300) "Prompt Corrective Action Info (PCA) (Schedule G)." * Click here for aggregate financial information for U.S. credit unions.