Safe and Sound

DEPARTMENT OF CORRECTIONS

Baton Rouge, LA
5
Star Rating
Started in 1957, DEPARTMENT OF CORRECTIONS is an NCUA-insured credit union based in Baton Rouge, LA. The credit union holds assets of $80.9 million, according to June 30, 2017, regulatory filings.

With 44 full-time employees, the credit union currently holds loans and leases worth $50.2 million. Its 13,027 members currently have $65.9 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, DEPARTMENT OF CORRECTIONS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is key. From a safety and soundness perspective, the more capital, the better.

DEPARTMENT OF CORRECTIONS beat out the national average of 15.26 points on our test to measure capital adequacy, racking up 26 out of a possible 30 points.

DEPARTMENT OF CORRECTIONS appears to be more resilient than its peers, with a capitalization ratio of 18.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these kinds of assets could eventually be required to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the chances of a future failure.

DEPARTMENT OF CORRECTIONS exceeded the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A below-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 making money affects its long-term survivability. 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 better prepared to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, DEPARTMENT OF CORRECTIONS scored 16 out of a possible 30, beating the national average of 10.31.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 7.00 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.