Safe and Sound

FREEDOM

SPRINGFIELD, MA
5
Star Rating
SPRINGFIELD, MA-based FREEDOM is an NCUA-insured credit union started in 1986. The credit union has $482.1 million in assets, according to December 31, 2017, regulatory filings.

With 103 full-time employees, the credit union has amassed loans and leases worth $314.8 million. Its 27,760 members currently have $380.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FREEDOM exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is useful. It acts as a buffer against losses and as protection for members during times of economic trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

FREEDOM racked up 22 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating out the national average of 15.65.

FREEDOM appears to be more resilient than its peers, with a capitalization ratio of 22.00 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 mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets suggests a credit union may eventually have to use capital to absorb losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

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

A below-average ratio of problem 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 making money has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

FREEDOM scored 12 out of a possible 30 on Bankrate's test of earnings, beating the national average of 10.11.

FREEDOM had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's outperforming 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.