Safe and Sound

1ST FINANCIAL

Wentzville, MO
2
Star Rating
Wentzville, MO-based 1ST FINANCIAL is an NCUA-insured credit union founded in 1968. As of December 31, 2017, the credit union had assets of $250.1 million.

With 90 full-time employees, the credit union currently holds loans and leases worth $219.8 million. Its 33,875 members currently have $189.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, 1ST FINANCIAL exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial stability, capital is useful. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, 1ST FINANCIAL received a score of 6 out of a possible 30 points, failing to reach the national average of 15.65.

1ST FINANCIAL appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 6.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

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

A credit union with extensive holdings of these types of assets may eventually have to use capital to absorb losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a future failure.

1ST FINANCIAL scored below the national average of 38.09 on Bankrate's asset quality test, racking up 32 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's earnings test, 1ST FINANCIAL scored 2 out of a possible 30, lower than the national average of 10.11.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.