WHAT IS
SAFE AND SOUND?
Capital is a key measurement of an institution's financial resilience. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.
FIRST CLASS exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 22 out of a possible 30 points.
FIRST CLASS's capitalization ratio of 22.00 percent in our test was better than the average for all credit unions, a sign that it's more well prepared for financial trouble than its peers.
Bankrate uses this test to estimate the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with large numbers of these types of assets could eventually be required to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.
FIRST CLASS scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.
Troubled assets made up 0.00 percent of FIRST CLASS's total assets in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.
How successful a credit union is at earning money affects its long-term survivability. Earnings may be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, potentially making the credit union better able to withstand financial shocks. Losses, on the other hand, lessen a credit union's ability to do those things.
FIRST CLASS did below-average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One indication that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.
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.