Safe and Sound

ADVANCE FINANCIAL

SCHERERVILLE, IN
4
Star Rating
ADVANCE FINANCIAL is a SCHERERVILLE, IN-based, NCUA-insured credit union founded in 1937. The credit union holds assets of $139.9 million, according to December 31, 2017, regulatory filings.

With 41 full-time employees, the credit union holds loans and leases worth $91.8 million. Its 13,770 members currently have $126.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ADVANCE FINANCIAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is crucial. It works as a buffer against losses and as protection for members when a credit union is experiencing economic trouble. When it comes to safety and soundness, more capital is preferred.

On our test to measure capital adequacy, ADVANCE FINANCIAL received a score of 6 out of a possible 30 points, failing to reach the national average of 15.65.

ADVANCE FINANCIAL appears to be on less solid financial footing 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

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

Having a large number of these kinds of assets suggests a credit union may eventually have to use capital to cover losses, decreasing its equity buffer. 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.

ADVANCE FINANCIAL 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 below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand financial trouble. However, credit unions that are losing money are less able to do those things.

ADVANCE FINANCIAL did above-average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

One indication 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.