Safe and Sound

PROSPECTORS FCU

DIAMOND BAR, CA
4
Star Rating
PROSPECTORS FCU is a DIAMOND BAR, CA-based, NCUA-insured credit union that opened its doors in 1949. The credit union holds assets of $71.0 million, according to June 30, 2017, regulatory filings.

Thanks to the work of 15 full-time employees, the credit union holds loans and leases worth $39.9 million. Its 5,256 members currently have $58.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PROSPECTORS FCU exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is experiencing financial instability. Therefore, an institution's level of capital is an important measurement of its financial resilience. When it comes to safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, PROSPECTORS FCU received a score of 14 out of a possible 30 points, lower than the national average of 15.26.

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

Asset Quality Score

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with lots of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. 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, reducing earnings and elevating the chances of a future failure.

PROSPECTORS FCU scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.15.

The credit union's ratio of problem assets was 1.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. Earnings can 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 prepared to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

PROSPECTORS FCU did below-average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

The credit union had an earnings ratio of 4.00 percent in our test, higher than the average for all credit unions, a sign that it's beating 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.