Safe and Sound

CORRECTIONS

SOLEDAD, CA
4
Star Rating
CORRECTIONS is a SOLEDAD, CA-based, NCUA-insured credit union that opened its doors in 1959. Regulatory filings show the credit union having assets of $14.1 million, as of December 31, 2017.

Thanks to the work of 6 full-time employees, the credit union currently holds loans and leases worth $12.1 million. CORRECTIONS's 2,426 members currently have $12.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CORRECTIONS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members during times of economic trouble for the credit union. Therefore, a credit union's level of capital is a crucial measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

CORRECTIONS received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

CORRECTIONS appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, below the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid loans.

Having extensive holdings of these types of assets means a credit union may have to use capital to absorb losses, diminishing its equity cushion. 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.

On Bankrate's asset quality test, CORRECTIONS 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, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, reduce a credit union's ability to do those things.

CORRECTIONS did above-average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.