NCUA definition of capital and net worth:
A credit union’s capital is defined as the total of its regular reserves, allowance for loan and lease losses, special reserves, undivided earnings, accumulated unrealized gains or losses on available-for-sale (AFS) securities, and that portion of year-to-date net income that has not yet been closed to the appropriate capital account. Capital accounts provide (1) a cushion for anticipated and unidentified losses, (2) a base for future growth, and (3) a means by which the credit union can meet competitive pressures as they arise. Capital provides the credit union a cost-free source of funds.
Net worth is defined as the retained earnings balance of the credit union at quarter end as determined under generally accepted accounting principles (GAAP). See the FCU Act §216(d)(o)(2).
Retained earnings consist of undivided earnings, regular reserves, and any other appropriations designated by management or regulatory authorities. Net worth does not include the Allowance for Loan and Lease Losses account. This means that net worth only includes undivided earnings and appropriations of undivided earnings.