Safe and Sound

REDWOOD

SANTA ROSA, CA
5
Star Rating
REDWOOD is an NCUA-insured credit union founded in 1950 and currently based in SANTA ROSA, CA. As of June 30, 2017, the credit union had assets of $3.54 billion.

With 496 full-time employees, the credit union currently holds loans and leases worth $2.71 billion. Its 236,829 members currently have $3.08 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, REDWOOD exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial stability, capital is important. When it comes to safety and soundness, the more capital, the better.

REDWOOD came in below the national average of 15.26 on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

REDWOOD had a capitalization ratio of 12.00 percent in our test, below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these kinds of assets means a credit union could have to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and increasing the chances of a failure in the future.

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

A below-average ratio of troubled assets of 2.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

REDWOOD scored 26 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 10.31.

The credit union had an earnings ratio of 17.00 percent in our test, above the average for all credit unions, an indication that it's doing better than 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.