Safe and Sound

FEDERAL EMPLOYEES

MONROE, LA
5
Star Rating
FEDERAL EMPLOYEES is an NCUA-insured credit union founded in 1941 and currently headquartered in MONROE, LA. Regulatory filings show the credit union having assets of $17.6 million, as of December 31, 2017.

Members have $12.7 million on deposit tended by 4 full-time employees. With that footprint, the credit union has amassed loans and leases worth $12.7 million. Its 1,443 members currently have $11.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FEDERAL EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial strength, capital is important. When looking at safety and soundness, the more capital, the better.

FEDERAL EMPLOYEES scored above the national average of 15.65 points on our test to measure capital adequacy, scoring 30 out of a possible 30 points.

FEDERAL EMPLOYEES's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

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

A credit union with lots of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

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

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. Earnings may be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, FEDERAL EMPLOYEES scored 10 out of a possible 30, falling short of the national average of 10.11.

One indication that the credit union is outperforming 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.