Safe and Sound

ABCO

RANCOCAS, NJ
2
Star Rating
ABCO is an NCUA-insured credit union started in 1958 and currently headquartered in RANCOCAS, NJ. Regulatory filings show the credit union having $222.9 million in assets, as of June 30, 2017.

Thanks to the efforts of 77 full-time employees, the credit union holds loans and leases worth $115.4 million. ABCO's 35,354 members currently have $205.9 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, ABCO exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is key. It works as a bulwark against losses and provides protection for members during periods of financial instability for the credit union. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, ABCO received a score of 4 out of a possible 30 points, below the national average of 15.26.

ABCO's capitalization ratio of 7.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these kinds of assets means a credit union could eventually have to use capital to absorb losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and increasing the chances of a future failure.

ABCO scored 32 out of a possible 40 points on Bankrate's test of asset quality, below the national average of 38.15.

ABCO's ratio of problem assets was 14.00 percent in our test, higher than the national average and something to watch.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's earnings test, ABCO scored 0 out of a possible 30, failing to reach the national average of 10.31.

ABCO had an earnings ratio of -3.00 percent in our test, below the average for all credit unions, suggesting that it's lagging behind its peers in this area.








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.