Safe & Sound » Bank Ratings » EVANGELICAL CHRISTIAN


955 W Imperial Hwy, PO Box 2400
Brea, CA 92822-2400


Predictive Indicator + (improve)
As of September 30, 2014
Credit Union ID 63837

A credit union is a nonprofit, cooperative financial institution, owned and administered by individual members, who must meet eligibility requirements to join. Credit unions pay no federal income tax. Community development credit unions are chartered to serve the needs of low income members who reside in financially distressed or under-served communities.

The Bankrate proprietary credit union rating model analyzes capitalization, asset quality, earnings, and liquidity to produce composite and component "Star" ratings that can be used as a measure of the rated entity's financial safety and soundness. Additionally, early warning components of the model highlight operating characteristics of immediate concern and recommended follow-up actions. The analyses are not adjusted for TARP funding and those institutions receiving funds may receive ratings that would differ were the TARP funds adjusted out of the analyses. You can check whether or not this institution has received TARP funding and whether or not they have paid it back at

Report Date September 30, 2014
Report Period 9 months
Star Composite Rating, Percentile Rank 1 /0.39
Predictive Indicator + (improve)
Earnings Rating, Percentile Rank 1 /0.56
Asset Quality Rating, Percentile Rank 1 /0.43
Capital Rating, Percentile Rank 1 /12.17
Liquidity Rating, Percentile Rank 2 /33.90
Institution Asset Size 1.0224 billion
Deposits 769.0599 million
Loans 733.0710 million
Equity 77.9937 million
Net Profit/Loss -14,736.7670 thousand


Component star rating: 1 star
Capital highlights

Capitalization stands as protection against loss for credit union members, creditors and, if applicable, the insurer. Regulators place a high degree of importance upon assessments of capitalization.

Key measures of Capital AdequacyRatio (%)Assessment
Net Capital / Assets 7.63Below Peer Norm
Capital (1) / Assets 9.59Approximates Peer Norm
(1) Includes loan loss allowance.

Component star rating: 1 star
Asset quality highlights

Asset quality is a major determinant of the viability of any banking institution. Poor asset quality will have a very direct impact upon other components and regulators invest substantial amounts of time and resources in gauging the quality of loans and investments.

Key Asset Quality information and ratios:Ratio (%)Assessment
Nonperforming Asset Ratio (2)50.10Highly Problematic
Loss Reserve Coverage (3)82.49Well Below Normal
Asset Growth Rate -4.82Below Normal
(2) Nonperforming Assets/Equity plus Loss Reserves

(3) Loan Loss reserves/Delinquent Loans

Component star rating: 1 star
Earnings highlights

A credit union's profitability is critical to building capital and establishing adequate loss reserves.

Key Earnings information and ratios:Ratio (%)Assessment
Return on Average Assets -1.27Substantially Below Average
Overhead / Average Assets 3.51Significantly Higher Than Average
Note: The earnings assessment is based on the latest four quarters of income and expense.

Component star rating: 2 starstar
Liquidity highlights

Liquidity provides funding for normal operations and represents a reserve for unanticipated disintermediation.

Key measures of Liquidity:Ratio (%)Assessment
Balance Sheet Liquidity10.64modest

Early warning highlights

Early warning indicators identify areas of potential concern, which may lead to financial deterioration and thus, require inquiry or in depth investigation.
For this institution we have noted:

  • Capital Adequacy
  • Nonperforming Assets
  • Overhead

Institution Commentary

OVERVIEW of Institution
EVANGELICAL CHRISTIAN is a state chartered credit union, which, as of September 30, 2014, reported total assets of approximately $1.0224 billion. At that date, loans and deposits held by the institution amounted to $733.0710 million and $769.0599 million, respectively. Equity, the difference between a credit union's total assets and total liabilities, was determined to have been $77.9937 million, which was 7.63% of total assets.

Bankrate believes that, as of September 30, 2014, this credit union exhibited a significantly below average condition, characterized by well below standard capitalization, very questionable asset quality, substantially lower than normal profitability, and lower than normal liquidity.

Balance sheet structural changes, through the one year period of time ended September 30, 2014, have had little or no positive, and quite possibly a negative, impact upon the institution's capital position. Our analytical methodology does take into account the quantity, quality, durability, and direction of net worth, and, as set forth above, we have determined, based upon our series of tests, that this credit union demonstrates well below standard capitalization. Notwithstanding any of the information contained within this section, we believe, based on our analysis, that the institution should consider plans for enhancing reported capitalization.

The institution reveals, as previously stated, very questionable asset quality. That conclusion incorporates our analysis of data depicting regional economic conditions as well as our computations of a highly problematic September 30, 2014 nonperforming asset ratio and well below normal reserve coverage for nonperforming loans. The institution's current level of nonperforming assets could lead to sharp write-downs and consequent substantial loss provisions. Hence, careful monitoring and additional inquiry are warranted.

Credit card lending activities should not, based on our analysis of asset quality trends and conditions, have a substantial negative impact upon future results.

For the year ended September 30, 2014, this institution recorded a net loss of -$13,321.50 thousand, which represented a return on average assets (ROA) of -1.27%. Year earlier four quarter results amounted to a net profit of $3,998,848, or a 0.37% ROA. ROA is the key measurement of profitability within the credit union industry, and the industry's ROA, for the nine months ended September 30, 2014, approximated 0.80%.

We have concluded that, for the four quarters ending September 30 2014, the institution achieved a substantially below average return on average assets , and, in fact, sustained an actual loss for the period as noted perviously . A significantly higher than average overhead ratio is in evidence.

As of September 30, 2014, the institution displayed modest balance sheet liquidity.

Accounting principles require some securities to be categorized as "Available-for-Sale." Changes in market value of these securities are reflected through the GAAP (Generally Accepted Accounting Principles) net worth of the institution. Based upon the credit union's present balance sheet, changes in the value of the current level of securities reported as are almost certain to have a substantial impact upon future net worth of the credit union.

This credit union has been rated significantly below average.
Negative factors that impacted that rating follow:

  • Capitalization
  • Asset Quality
  • Earnings
  • Liquidity
As noted previously, early warning indicators possibly requiring specific investigation include:
  • Capital Adequacy
  • Nonperforming Assets
  • Overhead

As stated, we have determined a Composite Star rating for this credit union of 1 star , indicative of a significantly below average financial condition. At times, conditions of financial institutions change rapidly and significantly. Hence, our Safe & Sound Star ratings should not be deemed predictive of likely future ratings. However, in view of early warning indicators set forth within this report, in combination with the institution's financial data, we believe that the Star rating for this institution is likely to improve within the ensuing twelve month period.

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