WHAT IS
SAFE AND SOUND?
Capital works as a bulwark against losses and as protection for members when a credit union is experiencing financial trouble. It follows then that a credit union's level of capital is a valuable measurement of its financial strength. From a safety and soundness perspective, the higher the capital, the better.
BELLCO 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.
BELLCO appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions.
In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.
Having lots of these kinds of assets means a credit union could have to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and increasing the risk of a future failure.
On Bankrate's test of asset quality, BELLCO scored 40 out of a possible 40 points, better than the national average of 38.09 points.
BELLCO's ratio of troubled assets was 0.00 percent in our test, less than the national average and suggestive of greater financial strength than other credit unions.
How successful a credit union is at earning money affects its long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.
BELLCO scored 18 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.11.
One indication that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above the average for all credit unions.
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.