Calculating the Equity Ratio

At the end of each calendar year, the NCUA will calculate the equity ratio using the formula below for purposes of determining whether the NCUA Board must effect a distribution:

Quarter-End Calculation
Calendar Year-end Actual 12/31 Retained Earnings + Actual 12/31 Contributed Capital1
Actual 12/31 Insured Shares2

In all cases, retained earnings are net of any direct liabilities of the Share Insurance Fund and contingent liabilities for which no provision has been made.

The calendar year-end equity ratio will be calculated once fourth quarter Call Reports are validated by the NCUA. If the statutory requirements for declaring a distribution are met, the amount of the distribution will be determined as described in the equity distributions final rule.

Interim Reporting

The NCUA will calculate the equity ratio two times each year – using actual June data and actual December data – as soon as validated insured shares data is available.3 This will be the official equity ratio used for the purposes described above and for interim reporting, using the criteria in the following table:

Reporting Period March - August September - February
Numerator Actual 12/31 retained earnings + Actual 12/31 contributed capital Actual 6/30 retained earnings + Actual 6/30 contributed capital
Denominator Actual 12/31 insured shares Actual 6/30 insured shares

In all cases, retained earnings are net of any direct liabilities of the Share Insurance Fund and contingent liabilities for which no provision has been made.

Recently Reported Equity Ratio

Reporting Period Equity Ratio Data as-of
December 2018 1.39% December 2018
June 2018 1.35% June 2018
December 2017 1.46% December 2017

1 Actual retained earnings, defined as cumulative results of operations, excluding net cumulative unrealized gains and losses on investments and contributed capital using whole dollars from the trial balance that supports the Share Insurance Fund’s audited financial statements.

2 The aggregate amount of insured shares, using whole dollars, as reported by all insured credit unions on Form 5300 and 5310 Call Reports.

3 The available assets ratio will also be calculated twice per year using actual June data and actual December data for the numerator and denominator.