Safe and Sound

FEDONE

Laguna Niguel, CA
3
Star Rating
Laguna Niguel, CA-based FEDONE is an NCUA-insured credit union founded in 1961. As of December 31, 2017, the credit union had assets of $19.3 million.

Members have $6.3 million on deposit tended by 4 full-time employees. With that footprint, the credit union currently holds loans and leases worth $6.3 million. Its 2,314 members currently have $17.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FEDONE exhibited a generally satisfactory condition, earning 3 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 is a valuable measurement of a credit union's financial strength. It acts as a buffer against losses and provides protection for members during periods of financial instability for the credit union. When it comes to safety and soundness, the more capital, the better.

FEDONE received a score of 14 out of a possible 30 points on our test to measure capital adequacy, below the national average of 15.65.

FEDONE appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 14.00 percent in our test, less 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 loans, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these kinds of assets could eventually force a credit union to use capital to absorb losses, diminishing its equity cushion. 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 depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, FEDONE scored 36 out of a possible 40 points, less than the national average of 38.09 points.

A lower-than-average ratio of troubled 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 affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Conversely, losses take away from a credit union's ability to do those things.

FEDONE scored 0 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

One sign that the credit union is beating 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.