Safe and Sound

VERIDIAN

WATERLOO, IA
5
Star Rating
WATERLOO, IA-based VERIDIAN is an NCUA-insured credit union started in 1934. The credit union holds $3.30 billion in assets, according to June 30, 2017, regulatory filings.

With 755 full-time employees, the credit union has amassed loans and leases worth $2.78 billion. VERIDIAN's 211,389 members currently have $2.85 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, VERIDIAN exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during times of economic trouble for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is important. When looking at safety and soundness, more capital is preferred.

VERIDIAN fell below the national average of 15.26 on our test to measure capital adequacy, racking up 12 out of a possible 30 points.

VERIDIAN had a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these types of assets suggests a credit union could have to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be 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.

VERIDIAN exceeded the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 5.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in tough times. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's test of earnings, VERIDIAN scored 20 out of a possible 30, better than the national average of 10.31.

The credit union had an earnings ratio of 11.00 percent in our test, higher than the average for all credit unions, a sign 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.