Safe and Sound

1ST RESOURCE

BIRMINGHAM, AL
5
Star Rating
Started in 1940, 1ST RESOURCE is an NCUA-insured credit union based in BIRMINGHAM, AL. As of December 31, 2017, the credit union had assets of $37.4 million.

Thanks to the efforts of 9 full-time employees, the credit union holds loans and leases worth $31.1 million. 1ST RESOURCE's 2,395 members currently have $28.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, 1ST RESOURCE 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 key criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during periods of financial instability for the credit union. Therefore, when it comes to measuring an an institution's financial strength, capital is valuable. When it comes to safety and soundness, the more capital, the better.

1ST RESOURCE finished below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 12 out of a possible 30 points.

1ST RESOURCE had a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions, an indication that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, 1ST RESOURCE scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

Troubled assets made up 0.00 percent of 1ST RESOURCE's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings can 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 shocks. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, 1ST RESOURCE scored 20 out of a possible 30, exceeding the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's doing better than 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.