WHAT IS
SAFE AND SOUND?
When it comes to measuring a credit union's financial stability, capital is valuable. It works as a cushion against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.
1ST MIDAMERICA scored below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 12 out of a possible 30 points.
1ST MIDAMERICA's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.
In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.
A credit union with large numbers of these types of assets may eventually have to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.
1ST MIDAMERICA fell below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .
The credit union's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.
How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, diminish a credit union's ability to do those things.
1ST MIDAMERICA scored 12 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 10.11.
One indication that 1ST MIDAMERICA is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.
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.