Safe and Sound

CHICAGO AREA OFFICE

Chicago, IL
5
Star Rating
CHICAGO AREA OFFICE is a Chicago, IL-based, NCUA-insured credit union founded in 1943. The credit union has assets of $9.9 million, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union currently holds loans and leases worth $3.5 million. Its 1,618 members currently have $7.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHICAGO AREA OFFICE exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members during periods of financial instability for the credit union. It follows then that when it comes to measuring an a credit union's financial stability, capital is important. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, CHICAGO AREA OFFICE racked up 30 out of a possible 30 points, better than the national average of 15.65.

CHICAGO AREA OFFICE appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

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

A credit union with lots of these kinds of assets could eventually be forced to use capital to cover losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the chances of a failure in the future.

CHICAGO AREA OFFICE 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 potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand financial trouble. Credit unions that are losing money, however, are less able to do those things.

CHICAGO AREA OFFICE did below-average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One indication that the credit union 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.