(a) Net worth measures. For purposes of this part, a new credit union must determine its capital classification quarterly according to its net worth ratio.
(b) Effective date of net worth classification of new credit union. For purposes of subpart B of this part, the effective date of a new credit union's classification within a capital category in paragraph (c) of this section shall be determined as provided in § 702.101(c); and written notice of a decline in net worth classification in paragraph (c) of this section shall be given as required by § 702.101(c).
(c) Net worth categories. A credit union defined as “new” under this section shall be classified -
(1) Well capitalized if it has a net worth ratio of seven percent (7%) or greater;
(2) Adequately capitalized if it has a net worth ratio of six percent (6%) or more but less than seven percent (7%);
(3) Moderately capitalized if it has a net worth ratio of three and one-half percent (3.5%) or more but less than six percent (6%);
(4) Marginally capitalized if it has a net worth ratio of two percent (2%) or more but less than three and one-half percent (3.5%);
(5) Minimally capitalized if it has a net worth ratio of zero percent (0%) or greater but less than two percent (2%); and
(6) Uncapitalized if it has a net worth ratio of less than zero percent (0%).
Table 1 to § 702.202 - Capital Categories for New Credit Unions
| A new credit union's capital classification is | If it's net worth ratio is |
|---|---|
| Well Capitalized | 7% or above. |
| Adequately Capitalized | 6 to 7%. |
| Moderately Capitalized | 3.5% to 5.99%. |
| Marginally Capitalized | 2% to 3.49%. |
| Minimally Capitalized | 0% to 1.99%. |
| Uncapitalized | Less than 0%. |
(d) Reclassification based on supervisory criteria other than net worth. Subject to § 702.102(b), the NCUA Board may reclassify a well capitalized, adequately capitalized or moderately capitalized new credit union to the next lower capital category (each of such actions is hereinafter referred to generally as “reclassification”) in either of the circumstances prescribed in § 702.102(b).
(e) Consultation with state officials. The NCUA Board shall consult and seek to work cooperatively with the appropriate state official before reclassifying a federally insured state-chartered credit union under paragraph (d) of this section, and shall promptly notify the appropriate state official of its decision to reclassify.