Safe and Sound

CHIPHONE

ELKHART, IN
4
Star Rating
Founded in 1947, CHIPHONE is an NCUA-insured credit union based in ELKHART, IN. Regulatory filings show the credit union having assets of $87.1 million, as of December 31, 2017.

With 38 full-time employees, the credit union holds loans and leases worth $40.5 million. CHIPHONE's 10,756 members currently have $72.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHIPHONE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to grade American credit unions.

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 when a credit union is experiencing economic trouble. It follows then that an institution's level of capital is a key measurement of its financial fortitude. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, CHIPHONE racked up 20 out of a possible 30 points, above the national average of 15.65.

CHIPHONE had a capitalization ratio of 20.00 percent in our test, above the average for all credit unions, suggesting that it could be more resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these types of assets may eventually be required to use capital to cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, CHIPHONE scored 40 out of a possible 40 points, above the national average of 38.09 points.

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

Earnings score

A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

CHIPHONE 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 doing better than 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.