Safe and Sound

CHARTER OAK

WATERFORD, CT
4
Star Rating
WATERFORD, CT-based CHARTER OAK is an NCUA-insured credit union founded in 1939. As of December 31, 2017, the credit union had assets of $1.04 billion.

Thanks to the efforts of 202 full-time employees, the credit union has amassed loans and leases worth $852.9 million. CHARTER OAK's 68,304 members currently have $809.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHARTER OAK exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members during times of economic trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial strength, capital is important. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, CHARTER OAK received a score of 10 out of a possible 30 points, failing to reach the national average of 15.65.

CHARTER OAK had a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to cover 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 interest for the credit union, pushing down earnings and elevating the chances of a future failure.

CHARTER OAK scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to 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, expanding its capital cushion, or use them to address problematic loans, likely making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, have less ability to do those things.

CHARTER OAK scored 14 out of a possible 30 on Bankrate's earnings test, better than the national average of 10.11.

One indication that CHARTER OAK is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher than the average for all credit unions.

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.