Safe and Sound

BAXTER

Vernon Hills, IL
4
Star Rating
Vernon Hills, IL-based BAXTER is an NCUA-insured credit union founded in 1980. The credit union holds assets of $2.95 billion, according to December 31, 2017, regulatory filings.

With 534 full-time employees, the credit union holds loans and leases worth $2.72 billion. BAXTER's 226,754 members currently have $2.50 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BAXTER exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial resilience. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, BAXTER received a score of 10 out of a possible 30 points, less than the national average of 15.65.

BAXTER had a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these kinds of assets suggests a credit union may have to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.

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

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

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

BAXTER received above-average marks on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

BAXTER had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's beating 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.