Safe and Sound

JEFFERSON COMMUNITY

Madison, IN
4
Star Rating
JEFFERSON COMMUNITY is an NCUA-insured credit union founded in 1969 and currently based in Madison, IN. The credit union holds $12.6 million in assets, according to December 31, 2017, regulatory filings.

With 5 full-time employees, the credit union has amassed loans and leases worth $6.4 million. Its 2,371 members currently have $11.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, JEFFERSON COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is essential. It works as a cushion against losses and as protection for members during periods of financial trouble for the credit union. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, JEFFERSON COMMUNITY received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

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

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these types of assets could eventually force a credit union to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

JEFFERSON COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative 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 better able to withstand economic shocks. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's test of earnings, JEFFERSON COMMUNITY scored 18 out of a possible 30, better than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above 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.