Safe and Sound

CORNERSTONE

Freeport, IL
3
Star Rating
CORNERSTONE is a Freeport, IL-based, NCUA-insured credit union dating back to 1939. The credit union holds $111.8 million in assets, according to June 30, 2017, regulatory filings.

With 44 full-time employees, the credit union currently holds loans and leases worth $70.8 million. Its 13,788 members currently have $99.3 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, CORNERSTONE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a credit union's financial resilience. It works as a bulwark against losses and as protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, the higher the capital, the better.

CORNERSTONE received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.26.

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

Asset Quality Score

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

Having a large number of these types of assets means a credit union may have to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

CORNERSTONE scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.15.

Troubled assets made up 8.00 percent of the credit union's total assets in our test, higher than the national average and something to watch.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, CORNERSTONE scored 4 out of a possible 30, less than the national average of 10.31.

CORNERSTONE had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's right in line with 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.