Safe and Sound

LOCAL 20 IBEW

GRAND PRAIRIE, TX
2
Star Rating
LOCAL 20 IBEW is an NCUA-insured credit union started in 1964 and currently based in GRAND PRAIRIE, TX. Regulatory filings show the credit union having assets of $6.0 million, as of December 31, 2017.

With 3 full-time employees, the credit union holds loans and leases worth $3.4 million. Its 2,618 members currently have $4.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LOCAL 20 IBEW exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is essential. When looking at safety and soundness, the more capital, the better.

LOCAL 20 IBEW received a score of 8 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

LOCAL 20 IBEW appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 8.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

A credit union with a large number of these kinds of assets may eventually have to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

LOCAL 20 IBEW scored 32 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.09.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

LOCAL 20 IBEW fell behind the national average on Bankrate's earnings test, achieving a score of 4 out of a possible 30.

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.

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.