Safe and Sound

WATER AND POWER COMMUNITY

LOS ANGELES, CA
4
Star Rating
WATER AND POWER COMMUNITY is a LOS ANGELES, CA-based, NCUA-insured credit union that opened its doors in 1936. Regulatory filings show the credit union having assets of $633.3 million, as of June 30, 2017.

Members have $256.7 million on deposit tended by 97 full-time employees. With that footprint, the credit union holds loans and leases worth $256.7 million. WATER AND POWER COMMUNITY's 35,463 members currently have $577.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, WATER AND POWER COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is experiencing financial trouble. It follows then that a credit union's level of capital is a crucial measurement of its financial strength. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, WATER AND POWER COMMUNITY received a score of 8 out of a possible 30 points, coming in below the national average of 15.26.

WATER AND POWER COMMUNITY's capitalization ratio of 8.00 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 is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

A credit union with large numbers of these types of assets may eventually be required to use capital to cover losses, reducing its cushion 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, decreasing earnings and elevating the risk of a failure in the future.

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

Troubled assets made up 1.00 percent of WATER AND POWER COMMUNITY's total assets in our test, below the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's earnings test, WATER AND POWER COMMUNITY scored 18 out of a possible 30, beating the national average of 10.31.

One sign that the credit union is beating its peers in this area was its earnings ratio of 9.00 percent in our test, above 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.