Safe and Sound

FINANCIAL BUILDERS

Kokomo, IN
5
Star Rating
FINANCIAL BUILDERS is an NCUA-insured credit union started in 1964 and currently headquartered in Kokomo, IN. The credit union has assets of $90.4 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 26 full-time employees, the credit union has amassed loans and leases worth $74.6 million. FINANCIAL BUILDERS's 11,887 members currently have $69.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FINANCIAL BUILDERS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is key. It works as a cushion against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, FINANCIAL BUILDERS scored 18 out of a possible 30 points, beating out the national average of 15.65.

FINANCIAL BUILDERS had a capitalization ratio of 18.00 percent in our test, better than the average for all credit unions, suggesting that it could be more resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

Having lots of these types of assets suggests a credit union may eventually have to use capital to cover losses, reducing 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 depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, FINANCIAL BUILDERS scored 40 out of a possible 40 points, beating out 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 greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, FINANCIAL BUILDERS scored 16 out of a possible 30, beating the national average of 10.11.

One sign 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.