Safe and Sound

AAA

South Bend, IN
4
Star Rating
AAA is a South Bend, IN-based, NCUA-insured credit union founded in 1939. As of December 31, 2017, the credit union had assets of $61.1 million.

Thanks to the efforts of 24 full-time employees, the credit union holds loans and leases worth $27.3 million. AAA's 6,905 members currently have $53.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AAA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It works as a cushion against losses and provides protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, more capital is better.

AAA scored below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

AAA had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, suggesting 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 unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these kinds of assets suggests a credit union may have to use capital to cover losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

AAA scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand economic trouble. Conversely, losses reduce a credit union's ability to do those things.

On Bankrate's earnings test, AAA scored 4 out of a possible 30, less than the national average of 10.11.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, better 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.