Safe and Sound

STANFORD

Palo Alto, CA
5
Star Rating
STANFORD is a Palo Alto, CA-based, NCUA-insured credit union that opened its doors in 1959. Regulatory filings show the credit union having assets of $2.20 billion, as of June 30, 2017.

Members have $1.42 billion on deposit tended by 183 full-time employees. With that footprint, the credit union currently holds loans and leases worth $1.42 billion. STANFORD's 62,983 members currently have $1.84 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, STANFORD exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to evaluate U.S. 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 experiencing economic instability. It follows then that when it comes to measuring an a credit union's financial strength, capital is crucial. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, STANFORD received a score of 10 out of a possible 30 points, failing to reach the national average of 15.26.

STANFORD's capitalization ratio of 10.00 percent in our test was worse than the average for all credit unions, an indication 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 problem assets, such as past-due loans.

A credit union with extensive holdings of these types of assets could eventually have to use capital to absorb losses, diminishing its buffer of equity. 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, resulting in diminished earnings and potentially more risk of a failure in the future.

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

STANFORD's ratio of troubled assets was 1.00 percent in our test, below 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. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, STANFORD scored 20 out of a possible 30, exceeding the national average of 10.31.

One sign that STANFORD is running ahead of its peers in this area was its earnings ratio of 11.00 percent in our test, better than the average for all credit unions.

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.