Safe and Sound

FOUNTAIN VALLEY

Fountain Valley, CA
4
Star Rating
FOUNTAIN VALLEY is an NCUA-insured credit union founded in 1967 and currently based in Fountain Valley, CA. As of December 31, 2017, the credit union held assets of $2.0 million.

FOUNTAIN VALLEY's 235 members currently have $1.6 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $784,465.

Overall, Bankrate believes that, as of December 31, 2017, FOUNTAIN VALLEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during periods of economic instability for the credit union. Therefore, when it comes to measuring an an institution's financial resilience, capital is essential. When it comes to safety and soundness, the more capital, the better.

FOUNTAIN VALLEY did better than the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 28 out of a possible 30 points.

FOUNTAIN VALLEY appears to be more resilient than its peers, with a capitalization ratio of 28.00 percent in our test, above the average for all credit unions.

Asset Quality Score

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

A credit union with lots of these types of assets may eventually be forced to use capital to cover losses, cutting down on 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, resulting in diminished earnings and potentially more risk of a future failure.

FOUNTAIN VALLEY beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of FOUNTAIN VALLEY's total assets in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

FOUNTAIN VALLEY scored 0 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting 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.