Safe and Sound

ABERDEEN

ABERDEEN, SD
5
Star Rating
ABERDEEN, SD-based ABERDEEN is an NCUA-insured credit union started in 1935. The credit union has $128.1 million in assets, according to December 31, 2017, regulatory filings.

With 29 full-time employees, the credit union has amassed loans and leases worth $94.3 million. Its 11,526 members currently have $111.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ABERDEEN exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of a credit union's financial fortitude. It acts as a buffer against losses and provides protection for members during times of economic instability for the credit union. When it comes to safety and soundness, the higher the capital, the better.

ABERDEEN received a score of 14 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

ABERDEEN appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets may eventually be forced 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 no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

ABERDEEN came in below the national average of 38.09 on Bankrate's asset quality test, racking up 36 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 greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, likely making the credit union better prepared to withstand economic trouble. Conversely, losses diminish a credit union's ability to do those things.

ABERDEEN exceeded the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

One sign that ABERDEEN is beating 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.