Safe and Sound

COVANTAGE

Antigo, WI
5
Star Rating
COVANTAGE is an Antigo, WI-based, NCUA-insured credit union dating back to 1953. Regulatory filings show the credit union having assets of $1.45 billion, as of June 30, 2017.

Thanks to the work of 325 full-time employees, the credit union has amassed loans and leases worth $1.13 billion. COVANTAGE's 96,047 members currently have $1.27 billion in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is useful. It works as a bulwark against losses and as protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, COVANTAGE received a score of 14 out of a possible 30 points, failing to reach the national average of 15.26.

COVANTAGE appears to be weaker than its peers in this area, with a capitalization ratio of 11.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due loans.

Having lots of these types of assets suggests a credit union could have to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

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

A lower-than-average ratio of troubled assets of 2.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, COVANTAGE scored 20 out of a possible 30, better than the national average of 10.31.

One indication that the credit union is beating its peers in this area was its earnings ratio of 12.00 percent in our test, better than 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.