WHAT IS
SAFE AND SOUND?
When it comes to measuring a credit union's financial strength, capital is valuable. It works as a bulwark against losses and as protection for members when a credit union is experiencing financial instability. When it comes to safety and soundness, the higher the capital, the better.
GREATER CHAUTAUQUA fell below the national average of 15.65 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.
GREATER CHAUTAUQUA appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions.
This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.
Having large numbers of these types of assets means a credit union may have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.
GREATER CHAUTAUQUA fell short of the national average of 38.09 on Bankrate's asset quality test, racking up 32 out of a possible 40 points .
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
A credit union's ability to earn money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money are less able to do those things.
On Bankrate's earnings test, GREATER CHAUTAUQUA scored 8 out of a possible 30, failing to reach the national average of 10.11.
The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign 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.