Safe and Sound

EFCU FINANCIAL

BATON ROUGE, LA
5
Star Rating
Founded in 1934, EFCU FINANCIAL is an NCUA-insured credit union based in BATON ROUGE, LA. The credit union has assets of $395.4 million, according to December 31, 2017, regulatory filings.

Members have $330.1 million on deposit tended by 100 full-time employees. With that footprint, the credit union holds loans and leases worth $330.1 million. Its 39,319 members currently have $327.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, EFCU FINANCIAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial strength. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, EFCU FINANCIAL received a score of 10 out of a possible 30 points, failing to reach the national average of 15.65.

EFCU FINANCIAL had a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions, a sign that it's weaker than its peers.

Asset Quality Score

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

A credit union with extensive holdings of these kinds of assets may eventually be forced to use capital to absorb losses, decreasing 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, reducing earnings and elevating the chances of a future failure.

On Bankrate's asset quality test, EFCU FINANCIAL scored 40 out of a possible 40 points, beating the national average of 38.09 points.

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

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

EFCU FINANCIAL scored 20 out of a possible 30 on Bankrate's earnings test, better than the national average of 10.11.

One sign that EFCU FINANCIAL is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.