Safe and Sound

FREEDOM UNITED

ROCHESTER, PA
5
Star Rating
FREEDOM UNITED is a ROCHESTER, PA-based, NCUA-insured credit union started in 1939. Regulatory filings show the credit union having $61.4 million in assets, as of December 31, 2017.

With 15 full-time employees, the credit union has amassed loans and leases worth $18.6 million. FREEDOM UNITED's 7,191 members currently have $51.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FREEDOM UNITED exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It works as a cushion against losses and affords protection for members during periods of economic trouble for the credit union. From a safety and soundness perspective, more capital is better.

FREEDOM UNITED exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 24 out of a possible 30 points.

FREEDOM UNITED had a capitalization ratio of 24.00 percent in our test, higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets could eventually be required to use capital to absorb losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a failure in the future.

FREEDOM UNITED did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's earnings test, FREEDOM UNITED scored 8 out of a possible 30, falling short of the national average of 10.11.

FREEDOM UNITED had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's doing better than 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.