Safe and Sound

SONOMA

Santa Rosa, CA
5
Star Rating
SONOMA is a Santa Rosa, CA-based, NCUA-insured credit union dating back to 1961. As of June 30, 2017, the credit union had assets of $27.4 million.

Thanks to the efforts of 2 full-time employees, the credit union has amassed loans and leases worth $21.1 million. SONOMA's 1,903 members currently have $24.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SONOMA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial strength. It acts as a buffer against losses and as protection for members when a credit union is experiencing financial trouble. When looking at safety and soundness, the more capital, the better.

SONOMA received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, lower than the national average of 15.26.

SONOMA's capitalization ratio of 9.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with large numbers of these types of assets could eventually be forced to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the chances of a future failure.

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

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, SONOMA scored 24 out of a possible 30, beating out the national average of 10.31.

The credit union had an earnings ratio of 15.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.