WHAT IS
SAFE AND SOUND?
Capital works as a buffer against losses and provides protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an a credit union's financial resilience, capital is essential. From a safety and soundness perspective, the more capital, the better.
On our test to measure the adequacy of a credit union's capital, GLENDALE achieved a score of 16 out of a possible 30 points, beating out the national average of 15.65.
GLENDALE had a capitalization ratio of 16.00 percent in our test, equal to the average for all credit unions, an indication that it's right in line with its peers.
In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
Having extensive holdings of these kinds of assets means a credit union could have to use capital to absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.
GLENDALE scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.
A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
A credit union's profitability has an effect on 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 better prepared to withstand financial trouble. Conversely, losses take away from a credit union's ability to do those things.
GLENDALE did below-average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.
One indication that the credit union is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.