Safe and Sound

SOUTH DIVISION

Evergreen Park, IL
4
Star Rating
Started in 1935, SOUTH DIVISION is an NCUA-insured credit union headquartered in Evergreen Park, IL. The credit union has $48.4 million in assets, according to June 30, 2017, regulatory filings.

With 22 full-time employees, the credit union holds loans and leases worth $17.9 million. SOUTH DIVISION's 6,598 members currently have $41.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SOUTH DIVISION 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.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an a credit union's financial resilience, capital is essential. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, SOUTH DIVISION received a score of 12 out of a possible 30 points, below the national average of 15.26.

SOUTH DIVISION's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

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

A credit union with lots of these types of assets could eventually have to use capital to absorb losses, cutting down on its equity buffer. 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 failure in the future.

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

The credit union's ratio of problem assets was 4.00 percent in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money are less able to do those things.

SOUTH DIVISION scored 14 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.31.

SOUTH DIVISION had an earnings ratio of 6.00 percent in our test, better than the average for all credit unions, a sign 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.