Safe and Sound

INOVA

ELKHART, IN
4
Star Rating
ELKHART, IN-based INOVA is an NCUA-insured credit union started in 1942. The credit union has $329.9 million in assets, according to June 30, 2017, regulatory filings.

Members have $290.8 million on deposit tended by 96 full-time employees. With that footprint, the credit union currently holds loans and leases worth $290.8 million. INOVA's 32,408 members currently have $280.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, INOVA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is valuable. It acts as a bulwark against losses and affords protection for members when a credit union is experiencing financial instability. From a safety and soundness perspective, the higher the capital, the better.

INOVA received a score of 8 out of a possible 30 points on our test to measure capital adequacy, below the national average of 15.26.

INOVA's capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

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 loan loss reserves and overall capitalization.

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, diminishing 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 money, resulting in depressed earnings and potentially more risk of a future failure.

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

The credit union's ratio of problem assets was 14.00 percent in our test, higher than the national average and something to keep an eye on.

Earnings score

A credit union's earnings performance affects its safety and soundness. Earnings can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money are less able to do those things.

INOVA exceeded the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

The credit union had an earnings ratio of 10.00 percent in our test, above 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.