Safe and Sound

DAIJO

Orange, CA
5
Star Rating
DAIJO is an NCUA-insured credit union started in 1949 and currently based in Orange, CA. As of June 30, 2017, the credit union held assets of $1.6 million.

Its 151 members currently have $1.3 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $264,413.

Overall, Bankrate believes that, as of June 30, 2017, DAIJO exhibited a superior condition, earning a full 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 on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during periods of economic instability for the credit union. It follows then that when it comes to measuring an an institution's financial resilience, capital is crucial. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, DAIJO racked up 26 out of a possible 30 points, above the national average of 15.26.

DAIJO appears to be more resilient than its peers, with a capitalization ratio of 18.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets suggests a credit union could have to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a failure in the future.

DAIJO scored above the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 4.00 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 safety and soundness. Earnings may be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

DAIJO fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

DAIJO had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, a sign that it's running neck and neck with 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.