Safe and Sound

BANNER

PHOENIX, AZ
4
Star Rating
BANNER is a PHOENIX, AZ-based, NCUA-insured credit union that opened its doors in 1957. The credit union holds $58.9 million in assets, according to December 31, 2017, regulatory filings.

With 16 full-time employees, the credit union has amassed loans and leases worth $25.9 million. Its 8,736 members currently have $52.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BANNER exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at 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

Capital is an important measurement of an institution's financial fortitude. It acts as a bulwark against losses and provides protection for members during periods of economic instability for the credit union. When looking at safety and soundness, more capital is preferred.

BANNER received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

BANNER's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.

A credit union with lots of these types of assets could eventually have to use capital to cover losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's test of asset quality, BANNER scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

A lower-than-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

How successful a credit union is at making money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

BANNER scored 4 out of a possible 30 on Bankrate's earnings test, coming in below 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, suggesting that it's running ahead of 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.