WHAT IS
SAFE AND SOUND?
Capital works as a cushion against losses and provides protection for members when a credit union is experiencing financial trouble. It follows then that a credit union's level of capital is an essential measurement of its financial fortitude. From a safety and soundness perspective, more capital is preferred.
GIDEON finished below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.
GIDEON appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions.
This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.
A credit union with large numbers of these kinds of assets could eventually be forced 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 money, reducing earnings and elevating the chances of a failure in the future.
GIDEON scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .
A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses lessen a credit union's ability to do those things.
On Bankrate's earnings test, GIDEON scored 2 out of a possible 30, lower than the national average of 10.11.
The credit union 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.
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.