Safe and Sound

FARMERS INSURANCE GROUP

Los Angeles, CA
4
Star Rating
Founded in 1936, FARMERS INSURANCE GROUP is an NCUA-insured credit union based in Los Angeles, CA. Regulatory filings show the credit union having $787.7 million in assets, as of December 31, 2017.

Thanks to the work of 191 full-time employees, the credit union holds loans and leases worth $713.9 million. FARMERS INSURANCE GROUP's 50,178 members currently have $606.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FARMERS INSURANCE GROUP 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 key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is valuable. It works as a bulwark against losses and as protection for members during periods of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

FARMERS INSURANCE GROUP achieved a score of 18 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.

FARMERS INSURANCE GROUP appears to be stronger than its peers, with a capitalization ratio of 18.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets could eventually have to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

FARMERS INSURANCE GROUP beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, FARMERS INSURANCE GROUP scored 10 out of a possible 30, less than the national average of 10.11.

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