Safe and Sound

LOCAL 697

MERRILLVILLE, IN
4
Star Rating
Founded in 1958, LOCAL 697 is an NCUA-insured credit union headquartered in MERRILLVILLE, IN. As of December 31, 2017, the credit union held assets of $34.9 million.

Thanks to the work of 4 full-time employees, the credit union currently holds loans and leases worth $10.6 million. LOCAL 697's 2,903 members currently have $28.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LOCAL 697 exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to grade American 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 stability, capital is essential. It acts as a cushion against losses and provides protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, LOCAL 697 racked up 28 out of a possible 30 points, exceeding the national average of 15.65.

LOCAL 697 appears to be stronger than its peers, with a capitalization ratio of 28.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these types of assets means a credit union could eventually have to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

LOCAL 697 fell below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

The credit union's ratio of problem assets was 0.00 percent in our test, lower than 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, expanding its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

LOCAL 697 underperformed the average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.