Credit union balance sheets and income statements are facing prospects that are new to the industry. Costs associated with corporate recapitalization and NCUSIF stabilization are causing multiple unforeseen expenses across numerous line items on credit union financial statements. This dilemma began in the final reporting cycle of 2008, continued through 2009, and is now poised to reach into 2010.
Because the NCUA did not offer official guidance on how to account for the stabilization expense, credit unions accounted for these expenses across differing components of their income statements and balance sheets, making an "apples-to-apples" comparison increasingly difficult. The late-December announcement of an additional premium assessment at ASI-insured credit unions throws yet another layer of confusion into this process. This assessment to privately insured credit unions, which were insulated from the NCUSIF expense, represents a new round of unforeseen expenses for this group that had previously remained the last bastion of credit unions unaffected by this issue.
As we await year-end data, it remains unclear as to how credit unions will account for this ASI assessment when filing their finalized call reports. For more information on how credit unions are accounting for this expense, and for a detailed breakdown of how to create the most meaningful peer group for your financial comparisons in this age of multiple stabilization expenses, check out the video below for an excerpt from a recent webinar in our ongoing Power of Data series.