Safe and Sound

LOCAL 265 IBEW

LINCOLN, NE
3
Star Rating
LOCAL 265 IBEW is a LINCOLN, NE-based, NCUA-insured credit union that opened its doors in 1963. As of December 31, 2017, the credit union held assets of $3.1 million.

The credit union holds loans and leases worth $2.2 million. Its 977 members currently have $2.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LOCAL 265 IBEW exhibited a generally satisfactory condition, earning 3 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 score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a buffer against losses and affords protection for members during times of economic trouble for the credit union. From a safety and soundness perspective, the higher the capital, the better.

LOCAL 265 IBEW racked up 16 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

LOCAL 265 IBEW had a capitalization ratio of 16.00 percent in our test, identical the average for all credit unions, an indication that it's running neck and neck with its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due mortgages, 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 may eventually be required to use capital to absorb losses, decreasing 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 interest for the credit union, reducing earnings and elevating the chances of a future failure.

LOCAL 265 IBEW fell short of the national average of 38.09 on Bankrate's test of asset quality, racking up 32 out of a possible 40 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.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, LOCAL 265 IBEW scored 0 out of a possible 30, below the national average of 10.11.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above the average for all credit unions.

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.