WHAT IS
SAFE AND SOUND?
Capital works as a buffer against losses and as protection for members when a credit union is experiencing economic instability. It follows then that when it comes to measuring an an institution's financial strength, capital is important. From a safety and soundness perspective, the higher the capital, the better.
GEISMAR COMPLEX received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.
GEISMAR COMPLEX had a capitalization ratio of 8.00 percent in our test, lower than the average for all credit unions, a sign that it could have a harder time weathering financial trouble than its peers.
Bankrate uses this test to estimate the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.
Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to cover losses, shrinking its buffer of equity. 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, decreasing earnings and increasing the chances of a future failure.
On Bankrate's test of asset quality, GEISMAR COMPLEX scored 40 out of a possible 40 points, better than the national average of 38.09 points.
GEISMAR COMPLEX's ratio of problem assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.
How successful a credit union is at making money has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money are less able to do those things.
GEISMAR COMPLEX beat the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
GEISMAR COMPLEX had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's outperforming its peers in this area.
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.
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.