For purposes of this subpart--
Adverse scenario means a scenario that is more adverse than that associated with the baseline scenario.
Baseline scenario means a scenario that reflects the consensus views of the economic and financial outlook.
Capital plan means a written presentation of a covered credit union's capital planning strategies and capital adequacy process that includes the mandatory elements set forth in this subpart.
Covered credit union means a federally insured credit union whose assets were $10 billion or more on March 31 of the current calendar year.
Planning horizon means the period of 3 years over which capital planning projections extend.
Pre-provision net revenue means the sum of net interest income and non-interest income, less expenses, before adjusting for loss provisions.
Provision for loan and lease losses means the provision for loan and lease losses as reported by the covered credit union on its Call Report.
Reverse stress test means a test that defines severely unfavorable outcomes and then identifies events or scenarios that lead to these outcomes. Examples of severely unfavorable outcomes are breaching regulatory capital, failing to meet obligations, or being unable to continue independent operations.
Scenarios are those sets of conditions that affect the U.S. economy or the financial condition of a covered credit union that serve as the basis for stress testing, including, but not limited to, NCUA-established baseline, adverse, and severely adverse scenarios.
Sensitivity testing means testing the relationship between specific variables, parameters, and inputs and their impacts on analytical results.
Severely adverse scenario means a scenario that overall is more severe than that associated with the adverse scenario.
Stress test means the process to assess the potential impact of expected and stressed economic conditions on the consolidated earnings, losses, and capital of a covered credit union over the planning horizon, taking into account the current state of the covered credit union and the covered credit union's risks, exposures, strategies, and activities.
Stress test capital means net worth (less assistance provided under Section 208 of the Federal Credit Union Act, subordinated debt included in net worth, and NCUSIF deposit) under stress test scenarios.
Stress test capital ratio means a covered credit union's stress test capital divided by its total consolidated assets less NCUSIF deposit.