DEAR BOARD OF DIRECTORS:
Enclosed is a report highlighting the very positive credit union financial trends during the first half of 1997. The analysis is based on data compiled from the midyear 1997 Call Reports submitted by all federally insured credit unions. We are providing this information to keep you and your managers informed of the continuing strength and overall safety of the credit union system.
The industry’s favorable performance is also reflected in the continued stability of the National Credit Union Share Insurance Fund. As of August 31, only nine credit unions had failed this year; five entered into involuntary liquidation, and four merged with assistance. The cost to the NCUSIF of these failures was $1.2 million. Meanwhile, no new reserves have been added to the Fund in more than two years.
As of August 31, the equity level of the NCUSIF increased to 1.32 percent, positioning the agency to issue a third consecutive cash dividend to the federally insured credit unions. The NCUA Board will discuss the amount of the dividend at its October board meeting, and checks will likely be mailed October 31.
NCUA remains committed to working with credit unions across the nation to help them meet the financial needs of their members and communities. We hope to hear from you on how this process can continue.
NORMAN E. D’AMOURS