Safe and Sound

FLOODWOOD AREA

FLOODWOOD, MN
4
Star Rating
FLOODWOOD, MN-based FLOODWOOD AREA is an NCUA-insured credit union founded in 1937. The credit union holds assets of $18.6 million, according to December 31, 2017, regulatory filings.

Members have $9.0 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $9.0 million. Its 1,814 members currently have $15.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FLOODWOOD AREA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is valuable. It works as a bulwark against losses and as protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

FLOODWOOD AREA did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 24 out of a possible 30 points.

FLOODWOOD AREA appears to be on more solid financial footing than its peers, with a capitalization ratio of 24.00 percent in our test, above the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets suggests a credit union may eventually have to use capital to absorb losses, decreasing 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, pushing down earnings and elevating the chances of a failure in the future.

FLOODWOOD AREA scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

FLOODWOOD AREA's ratio of problem assets was 0.00 percent in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the credit union better able to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, FLOODWOOD AREA scored 4 out of a possible 30, lower than the national average of 10.11.

One sign that FLOODWOOD AREA is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.