Safe and Sound

CAPITAL AREA

AUGUSTA, ME
5
Star Rating
Founded in 1954, CAPITAL AREA is an NCUA-insured credit union headquartered in AUGUSTA, ME. As of December 31, 2017, the credit union had assets of $35.4 million.

With 12 full-time employees, the credit union has amassed loans and leases worth $30.0 million. Its 3,808 members currently have $28.8 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is an important measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

CAPITAL AREA scored 22 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

CAPITAL AREA appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these kinds of assets may eventually be required to use capital to cover losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the risk of a future failure.

CAPITAL AREA beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

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

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the credit union better able to withstand economic trouble. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, CAPITAL AREA scored 20 out of a possible 30, beating out the national average of 10.11.

CAPITAL AREA had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's outperforming 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.