Safe and Sound

BIRMINGHAM CITY

BIRMINGHAM, AL
5
Star Rating
BIRMINGHAM, AL-based BIRMINGHAM CITY is an NCUA-insured credit union started in 1956. As of December 31, 2017, the credit union had assets of $9.0 million.

With 4 full-time employees, the credit union currently holds loans and leases worth $6.5 million. Its 2,149 members currently have $7.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BIRMINGHAM CITY exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial strength. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

BIRMINGHAM CITY scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 20 out of a possible 30 points.

BIRMINGHAM CITY appears to be stronger than its peers, with a capitalization ratio of 20.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

This test's purpose is 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 past-due mortgages.

Having a large number of these types of assets means a credit union could have to use capital to absorb losses, reducing its equity buffer. 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, diminishing earnings and elevating the chances of a future failure.

BIRMINGHAM CITY exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, BIRMINGHAM CITY scored 12 out of a possible 30, above the national average of 10.11.

BIRMINGHAM CITY had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication 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.