Safe and Sound

CANAAN

Urbana, IL
2
Star Rating
Urbana, IL-based CANAAN is an NCUA-insured credit union started in 2001. As of December 31, 2017, the credit union held assets of $416,888.

CANAAN's 417 members currently have $366,705 in shares with the credit union. With that footprint, the credit union holds loans and leases worth $126,469.

Overall, Bankrate believes that, as of December 31, 2017, CANAAN exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is crucial. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, CANAAN scored 16 out of a possible 30 points, exceeding the national average of 15.65.

CANAAN had a capitalization ratio of 16.00 percent in our test, the same as the average for all credit unions, a sign that it's running neck and neck with its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due loans.

Having extensive holdings of these kinds of assets could eventually force a credit union to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, CANAAN scored 4 out of a possible 40 points, less than the national average of 38.09 points.

The credit union's ratio of troubled assets was 1.00 percent in our test, identical to the national average.

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

CANAAN scored 18 out of a possible 30 on Bankrate's earnings test, better than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than 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.