Safe and Sound

FREEDOM

Warminster, PA
5
Star Rating
Founded in 1934, FREEDOM is an NCUA-insured credit union headquartered in Warminster, PA. Regulatory filings show the credit union having $785.2 million in assets, as of December 31, 2017.

Members have $538.5 million on deposit tended by 108 full-time employees. With that footprint, the credit union holds loans and leases worth $538.5 million. Its 64,029 members currently have $690.1 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. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
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 crucial. It acts as a cushion against losses and provides protection for members during periods of economic trouble for the credit union. From a safety and soundness perspective, the higher the capital, the better.

FREEDOM received a score of 12 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

FREEDOM appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 12.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

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 unpaid mortgages.

Having a large number of these types of assets suggests a credit union may have to use capital to absorb losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the risk of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

FREEDOM scored 20 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.11.

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