Safe and Sound

IBEW LOCAL UNION 712

BEAVER, PA
4
Star Rating
BEAVER, PA-based IBEW LOCAL UNION 712 is an NCUA-insured credit union started in 1964. The credit union has $6.7 million in assets, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union holds loans and leases worth $3.1 million. Its 1,604 members currently have $6.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, IBEW LOCAL UNION 712 exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a crucial measurement of its financial resilience. From a safety and soundness perspective, the higher the capital, the better.

IBEW LOCAL UNION 712 came in below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 10 out of a possible 30 points.

IBEW LOCAL UNION 712 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, lower than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets means a credit union may have to use capital to absorb losses, shrinking its cushion 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, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, IBEW LOCAL UNION 712 scored 40 out of a possible 40 points, beating the national average of 38.09 points.

IBEW LOCAL UNION 712's ratio of problem assets was 0.00 percent in our test, beneath the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

IBEW LOCAL UNION 712 underperformed the average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

IBEW LOCAL UNION 712 had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's running ahead of its peers in this area.

WHAT IS SAFE & SOUND?

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.

Scoring methodology

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.