WHAT IS
SAFE AND SOUND?
Capital works as a bulwark against losses and affords protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is key. When it comes to safety and soundness, more capital is preferred.
FLAGSHIP COMMUNITY received a score of 4 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, lower than the national average of 15.65.
FLAGSHIP COMMUNITY appears to be weaker than its peers in this area, with a capitalization ratio of 4.00 percent in our test, below the average for all credit unions.
This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.
Having large numbers of these types of assets means a credit union could eventually have to use capital to cover losses, diminishing its cushion 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 failure in the future.
FLAGSHIP COMMUNITY scored 32 out of a possible 40 points on Bankrate's test of asset quality, failing to reach the national average of 38.09.
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.
A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.
On Bankrate's earnings test, FLAGSHIP COMMUNITY scored 16 out of a possible 30, above the national average of 10.11.
One indication that FLAGSHIP COMMUNITY is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.