Safe and Sound

NATCO

RICHMOND, IN
4
Star Rating
NATCO is a RICHMOND, IN-based, NCUA-insured credit union started in 1945. As of December 31, 2017, the credit union had assets of $79.6 million.

Members have $55.2 million on deposit tended by 52 full-time employees. With that footprint, the credit union currently holds loans and leases worth $55.2 million. Its 14,565 members currently have $69.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NATCO 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 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 buffer against losses and affords protection for members during times of economic instability for the credit union. It follows then that an institution's level of capital is a crucial measurement of its financial resilience. When looking at safety and soundness, the higher the capital, the better.

NATCO did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 16 out of a possible 30 points.

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

Asset Quality Score

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

A credit union with a large number of these types of assets may eventually be forced to use capital to cover losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, NATCO scored 36 out of a possible 40 points, less than the national average of 38.09 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 has an effect on its safety and soundness. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic trouble. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, NATCO scored 12 out of a possible 30, beating 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, an indication that it's beating 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.