Safe and Sound

FEDERAL EMPLOYEES WEST

LOS ANGELES, CA
4
Star Rating
FEDERAL EMPLOYEES WEST is a LOS ANGELES, CA-based, NCUA-insured credit union dating back to 1958. As of December 31, 2017, the credit union had assets of $11.1 million.

With 4 full-time employees, the credit union has amassed loans and leases worth $3.1 million. FEDERAL EMPLOYEES WEST's 1,622 members currently have $10.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FEDERAL EMPLOYEES WEST exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is experiencing economic instability. It follows then that a credit union's level of capital is an important measurement of its financial resilience. When it comes to safety and soundness, the more capital, the better.

FEDERAL EMPLOYEES WEST came in below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

FEDERAL EMPLOYEES WEST's capitalization ratio of 8.00 percent in our test was below the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

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 a large number of these kinds of assets could eventually be forced to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the risk of a failure in the future.

FEDERAL EMPLOYEES WEST beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

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

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

FEDERAL EMPLOYEES WEST exceeded the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

One indication that FEDERAL EMPLOYEES WEST 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.