Safe and Sound

INOVA

ELKHART, IN
4
Star Rating
INOVA is an ELKHART, IN-based, NCUA-insured credit union dating back to 1942. As of December 31, 2017, the credit union had assets of $348.5 million.

Members have $313.9 million on deposit tended by 106 full-time employees. With that footprint, the credit union holds loans and leases worth $313.9 million. INOVA's 32,418 members currently have $288.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, INOVA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is crucial. It acts as a buffer against losses and provides protection for members during periods of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

INOVA received a score of 8 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 15.65.

INOVA's capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets could eventually have to use capital to absorb losses, diminishing its buffer 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, diminishing earnings and increasing the chances of a future failure.

INOVA scored 32 out of a possible 40 points on Bankrate's asset quality test, failing to reach the national average of 38.09.

INOVA'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 safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

INOVA exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

INOVA had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.