Safe and Sound

BEACON CREDIT UNION, INCORPORATED

Lynchburg, VA
4
Star Rating
Founded in 1939, BEACON CREDIT UNION, INCORPORATED is an NCUA-insured credit union headquartered in Lynchburg, VA. As of December 31, 2017, the credit union held assets of $177.3 million.

Members have $142.5 million on deposit tended by 84 full-time employees. With that footprint, the credit union has amassed loans and leases worth $142.5 million. BEACON CREDIT UNION, INCORPORATED's 26,917 members currently have $157.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BEACON CREDIT UNION, INCORPORATED exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major 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 a useful measurement of an institution's financial resilience. It acts as a bulwark against losses and as protection for members when a credit union is struggling financially. When looking at safety and soundness, more capital is preferred.

BEACON CREDIT UNION, INCORPORATED received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

BEACON CREDIT UNION, INCORPORATED's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these types of assets means a credit union could have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, BEACON CREDIT UNION, INCORPORATED scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

The credit union's ratio of troubled assets was 0.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand financial trouble. Obviously, credit unions that are losing money are less able to do those things.

BEACON CREDIT UNION, INCORPORATED scored 10 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

BEACON CREDIT UNION, INCORPORATED had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's doing better than 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.