Safe and Sound

A. E. A.

YUMA, AZ
1
Star Rating
A. E. A. is a YUMA, AZ-based, NCUA-insured credit union started in 1942. Regulatory filings show the credit union having assets of $251.9 million, as of June 30, 2017.

With 95 full-time employees, the credit union currently holds loans and leases worth $209.1 million. A. E. A.'s 31,227 members currently have $226.9 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, A. E. A. exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. It follows then that a credit union's level of capital is a crucial measurement of its financial strength. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, A. E. A. received a score of 0 out of a possible 30 points, failing to reach the national average of 15.26.

A. E. A.'s capitalization ratio of 4.00 percent in our test was lower than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having extensive holdings of these types of assets could eventually force a credit union to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, A. E. A. scored 24 out of a possible 40 points, less than the national average of 38.15 points.

An above-average ratio of problem assets of 35.00 percent in our test was a potential cause for concern for A. E. A..

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Losses, on the other hand, reduce a credit union's ability to do those things.

A. E. A. scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.31.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 6.00 percent in our test, above the average for all credit unions.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.