Safe and Sound

BAXTER

Vernon Hills, IL
5
Star Rating
Vernon Hills, IL-based BAXTER is an NCUA-insured credit union started in 1980. Regulatory filings show the credit union having $2.81 billion in assets, as of June 30, 2017.

Thanks to the work of 534 full-time employees, the credit union holds loans and leases worth $2.51 billion. BAXTER's 215,808 members currently have $2.42 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, BAXTER exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial stability, capital is crucial. When it comes to safety and soundness, the higher the capital, the better.

BAXTER finished below the national average of 15.26 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

BAXTER had a capitalization ratio of 10.00 percent in our test, below the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets could eventually be required to use capital to cover losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, BAXTER scored 40 out of a possible 40 points, exceeding the national average of 38.15 points.

A lower-than-average ratio of troubled assets of 3.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses lessen a credit union's ability to do those things.

BAXTER scored 20 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.31.

The credit union had an earnings ratio of 12.00 percent in our test, higher than the average for all credit unions, an indication that it's beating 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.