Safe and Sound

DOWNEY

DOWNEY, CA
4
Star Rating
DOWNEY, CA-based DOWNEY is an NCUA-insured credit union founded in 1957. Regulatory filings show the credit union having assets of $217.0 million, as of June 30, 2017.

Thanks to the efforts of 32 full-time employees, the credit union holds loans and leases worth $86.9 million. Its 15,314 members currently have $190.9 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, DOWNEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to score American credit unions.

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 an institution's financial strength, capital is essential. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, DOWNEY received a score of 14 out of a possible 30 points, coming in below the national average of 15.26.

DOWNEY's capitalization ratio of 11.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

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 problem assets, such as unpaid mortgages.

A credit union with extensive holdings of these types of assets may eventually be required to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

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

DOWNEY's ratio of problem assets was 7.00 percent in our test, identical to the national average.

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 cushion, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, are less able to do those things.

DOWNEY fell short of the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

DOWNEY had an earnings ratio of 4.00 percent in our test, better than the average for all credit unions, suggesting that it's running ahead of 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.