Safe and Sound

FIRST

Hiawatha, IA
4
Star Rating
FIRST is an NCUA-insured credit union started in 1926 and currently based in Hiawatha, IA. The credit union holds $136.8 million in assets, according to December 31, 2017, regulatory filings.

With 24 full-time employees, the credit union has amassed loans and leases worth $107.0 million. Its 6,876 members currently have $101.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST exhibited a good condition, earning 4 out of 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.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. It follows then that when it comes to measuring an a credit union's financial strength, capital is key. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, FIRST received a score of 12 out of a possible 30 points, coming in below the national average of 15.65.

FIRST's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, an indication that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets could eventually be required to use capital to absorb losses, cutting down on its buffer of equity. 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, diminishing earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, FIRST scored 36 out of a possible 40 points, coming in below the national average of 38.09 points.

A below-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

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

FIRST did above-average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's running ahead of its peers in this area.

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.