Safe and Sound

E-CENTRAL

PASADENA, CA
5
Star Rating
PASADENA, CA-based E-CENTRAL is an NCUA-insured credit union founded in 1943. The credit union has $160.9 million in assets, according to June 30, 2017, regulatory filings.

With 44 full-time employees, the credit union currently holds loans and leases worth $96.4 million. Its 14,658 members currently have $130.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, E-CENTRAL 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 major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members during times of financial instability for the credit union. It follows then that when it comes to measuring an an institution's financial stability, capital is key. When it comes to safety and soundness, the higher the capital, the better.

E-CENTRAL did better than the national average of 15.26 points on our test to measure the adequacy of a credit union's capital, racking up 28 out of a possible 30 points.

E-CENTRAL had a capitalization ratio of 18.00 percent in our test, above the average for all credit unions, a sign that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having extensive holdings of these kinds of assets could eventually force a credit union to use capital to cover losses, decreasing its buffer 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, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, E-CENTRAL scored 40 out of a possible 40 points, above 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 superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

E-CENTRAL received below-average marks on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

One sign that E-CENTRAL is beating its peers in this area was its earnings ratio of 4.00 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.