Safe and Sound

FEDERATED EMPLOYEES

Owatonna, MN
5
Star Rating
Owatonna, MN-based FEDERATED EMPLOYEES is an NCUA-insured credit union founded in 1934. Regulatory filings show the credit union having assets of $43.3 million, as of December 31, 2017.

Thanks to the work of 4 full-time employees, the credit union holds loans and leases worth $24.2 million. FEDERATED EMPLOYEES's 4,695 members currently have $36.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FEDERATED EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is an important measurement of its financial fortitude. When looking at safety and soundness, the more capital, the better.

FEDERATED EMPLOYEES racked up 22 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

FEDERATED EMPLOYEES's capitalization ratio of 22.00 percent in our test was above the average for all credit unions, suggesting that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

Having lots of these types of assets may eventually force a credit union to use capital to cover losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

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

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union better able to withstand financial trouble. Conversely, losses take away from a credit union's ability to do those things.

FEDERATED EMPLOYEES scored 10 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

One indication that FEDERATED EMPLOYEES is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.