WHAT IS
SAFE AND SOUND?
Capital acts as a cushion against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is key. When looking at safety and soundness, the more capital, the better.
GREENSBORO POSTAL achieved a score of 30 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 15.65.
GREENSBORO POSTAL's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.
In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.
A credit union with a large number of these types of assets could eventually be required to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and elevating the risk of a failure in the future.
On Bankrate's asset quality test, GREENSBORO POSTAL scored 40 out of a possible 40 points, above the national average of 38.09 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.
How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.
GREENSBORO POSTAL fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.
One indication that GREENSBORO POSTAL is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.