Safe and Sound

FEDMONT

MONTGOMERY, AL
4
Star Rating
FEDMONT is an NCUA-insured credit union founded in 1960 and currently based in MONTGOMERY, AL. The credit union holds $13.6 million in assets, according to June 30, 2017, regulatory filings.

Members have $4.9 million on deposit tended by 4 full-time employees. With that footprint, the credit union has amassed loans and leases worth $4.9 million. FEDMONT's 1,458 members currently have $11.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, FEDMONT exhibited a good condition, earning 4 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 score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is key. It acts as a cushion against losses and affords protection for members during periods of financial trouble for the credit union. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, FEDMONT racked up 20 out of a possible 30 points, exceeding the national average of 15.26.

FEDMONT appears to be stronger than its peers, with a capitalization ratio of 14.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets means a credit union could eventually have 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 money, resulting in reduced earnings and potentially more risk of a future failure.

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

The credit union's ratio of troubled assets was 8.00 percent in our test, higher than the national average and something to keep an eye on.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's test of earnings, FEDMONT scored 6 out of a possible 30, below the national average of 10.31.

One indication that the credit union is beating its peers in this area was its earnings ratio of 2.00 percent in our test, higher 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.