Safe and Sound

BAYOU COMMUNITY

CARVILLE, LA
3
Star Rating
BAYOU COMMUNITY is an NCUA-insured credit union founded in 1957 and currently based in CARVILLE, LA. The credit union has $11.6 million in assets, according to December 31, 2017, regulatory filings.

Members have $8.0 million on deposit tended by 4 full-time employees. With that footprint, the credit union has amassed loans and leases worth $8.0 million. Its 1,102 members currently have $10.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BAYOU COMMUNITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members during periods of economic trouble for the credit union. Therefore, when it comes to measuring an an institution's financial fortitude, capital is essential. From a safety and soundness perspective, the higher the capital, the better.

BAYOU COMMUNITY came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 14 out of a possible 30 points.

BAYOU COMMUNITY 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 determine the impact of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with large numbers of these types of assets may eventually be required to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the chances of a future failure.

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

The credit union's ratio of troubled assets was 0.00 percent in our test, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

BAYOU COMMUNITY scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.11.

One sign that BAYOU COMMUNITY is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.