Safe and Sound

DEPARTMENT OF COMMERCE

WASHINGTON, DC
4
Star Rating
DEPARTMENT OF COMMERCE is a WASHINGTON, DC-based, NCUA-insured credit union founded in 1964. The credit union holds assets of $435.1 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 64 full-time employees, the credit union holds loans and leases worth $259.7 million. DEPARTMENT OF COMMERCE's 19,346 members currently have $375.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DEPARTMENT OF COMMERCE 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 key criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during times of economic instability for the credit union. It follows then that when it comes to measuring an a credit union's financial strength, capital is useful. When looking at safety and soundness, the higher the capital, the better.

DEPARTMENT OF COMMERCE came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 10 out of a possible 30 points.

DEPARTMENT OF COMMERCE 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

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

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

DEPARTMENT OF COMMERCE scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The credit union's ratio of troubled assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's earnings test, DEPARTMENT OF COMMERCE scored 10 out of a possible 30, lower than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.