Safe and Sound

DESCO

PORTSMOUTH, OH
4
Star Rating
Started in 1963, DESCO is an NCUA-insured credit union headquartered in PORTSMOUTH, OH. Regulatory filings show the credit union having $282.7 million in assets, as of December 31, 2017.

With 97 full-time employees, the credit union has amassed loans and leases worth $175.4 million. Its 22,745 members currently have $253.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DESCO exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major 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 affords protection for members during times of financial trouble for the credit union. Therefore, a credit union's level of capital is an essential measurement of its financial resilience. When it comes to safety and soundness, the more capital, the better.

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

DESCO appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these types of assets could eventually require a credit union to use capital to absorb losses, reducing its equity buffer. 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, resulting in depressed earnings and potentially more risk of a future failure.

DESCO exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

DESCO exceeded the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

DESCO had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.