Safe and Sound

DOWNEY

DOWNEY, CA
4
Star Rating
Started in 1957, DOWNEY is an NCUA-insured credit union headquartered in DOWNEY, CA. Regulatory filings show the credit union having assets of $220.9 million, as of December 31, 2017.

With 36 full-time employees, the credit union holds loans and leases worth $93.6 million. Its 15,763 members currently have $192.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DOWNEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

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

DOWNEY received a score of 12 out of a possible 30 points on our test to measure capital adequacy, falling short of the national average of 15.65.

DOWNEY had a capitalization ratio of 12.00 percent in our test, less than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.

Having extensive holdings of these kinds of assets means a credit union could eventually have to use capital to cover losses, diminishing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a future failure.

DOWNEY exceeded the national average of 38.09 on Bankrate's asset quality test, 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

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

DOWNEY fell short of the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

DOWNEY had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication 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.