Safe and Sound

EMBARRASS VERMILLION

Aurora, MN
4
Star Rating
AURORA, MN-based EMBARRASS VERMILLION is an NCUA-insured credit union started in 1941. Regulatory filings show the credit union having assets of $33.2 million, as of December 31, 2017.

Thanks to the efforts of 11 full-time employees, the credit union holds loans and leases worth $23.5 million. Its 3,699 members currently have $28.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, EMBARRASS VERMILLION 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 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 is a key measurement of an institution's financial fortitude. It acts as a cushion against losses and as protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, EMBARRASS VERMILLION scored 16 out of a possible 30 points, better than the national average of 15.65.

EMBARRASS VERMILLION's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets may eventually force a credit union to use capital to cover losses, reducing 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 depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, EMBARRASS VERMILLION scored 36 out of a possible 40 points, lower than the national average of 38.09 points.

Troubled assets made up 0.00 percent of EMBARRASS VERMILLION's total assets in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial trouble. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, EMBARRASS VERMILLION scored 16 out of a possible 30, exceeding 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 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.