Safe and Sound

EBSCO

BIRMINGHAM, AL
1
Star Rating
EBSCO is a BIRMINGHAM, AL-based, NCUA-insured credit union founded in 1953. Regulatory filings show the credit union having assets of $11.9 million, as of December 31, 2017.

Members have $7.3 million on deposit tended by 4 full-time employees. With that footprint, the credit union holds loans and leases worth $7.3 million. Its 1,316 members currently have $10.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, EBSCO exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a crucial measurement of its financial strength. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, EBSCO received a score of 6 out of a possible 30 points, less than the national average of 15.65.

EBSCO's capitalization ratio of 6.00 percent in our test was worse than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.

Having extensive holdings of these types of assets means a credit union could have to use capital to cover losses, reducing its buffer of equity. 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 diminished earnings and potentially more risk of a failure in the future.

EBSCO scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the credit union better able to withstand economic shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's test of earnings, EBSCO scored 0 out of a possible 30, lower than the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.