Safe and Sound

FEDERAL FAMILY

SALT LAKE CITY, UT
4
Star Rating
FEDERAL FAMILY is a SALT LAKE CITY, UT-based, NCUA-insured credit union founded in 1954. The credit union has $28.5 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 5 full-time employees, the credit union holds loans and leases worth $13.7 million. Its 2,768 members currently have $24.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FEDERAL FAMILY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members during times of economic instability for the credit union. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is crucial. When it comes to safety and soundness, the more capital, the better.

FEDERAL FAMILY scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 18 out of a possible 30 points.

FEDERAL FAMILY appears to be more resilient 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 determine the effect of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with large numbers of these kinds of assets could eventually have to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

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

FEDERAL FAMILY's ratio of problem assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, FEDERAL FAMILY scored 4 out of a possible 30, coming in below the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.