WHAT IS
SAFE AND SOUND?
Capital is an essential measurement of a credit union's financial strength. It works as a buffer against losses and as protection for members during times of economic trouble for the credit union. From a safety and soundness perspective, more capital is preferred.
On our test to measure capital adequacy, ALLEGENT COMMUNITY received a score of 14 out of a possible 30 points, falling short of the national average of 15.65.
ALLEGENT COMMUNITY had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.
This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.
Having large numbers of these kinds of assets means a credit union may have to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a failure in the future.
On Bankrate's test of asset quality, ALLEGENT COMMUNITY scored 40 out of a possible 40 points, better than the national average of 38.09 points.
ALLEGENT COMMUNITY's ratio of troubled assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.
A credit union's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, reduce a credit union's ability to do those things.
ALLEGENT COMMUNITY scored 2 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.
ALLEGENT COMMUNITY had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's outperforming its peers in this area.
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.