Safe and Sound

NEBRASKA RURAL ELECTRIC ASSOCIATION

LINCOLN, NE
4
Star Rating
Founded in 1973, NEBRASKA RURAL ELECTRIC ASSOCIATION is an NCUA-insured credit union headquartered in LINCOLN, NE. Regulatory filings show the credit union having $6.4 million in assets, as of December 31, 2017.

NEBRASKA RURAL ELECTRIC ASSOCIATION's 889 members currently have $5.6 million in shares with the credit union. With that footprint, the credit union holds loans and leases worth $3.0 million.

Overall, Bankrate believes that, as of December 31, 2017, NEBRASKA RURAL ELECTRIC ASSOCIATION 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 major criteria Bankrate used to evaluate American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is a key measurement of its financial resilience. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, NEBRASKA RURAL ELECTRIC ASSOCIATION racked up 16 out of a possible 30 points, above the national average of 15.65.

NEBRASKA RURAL ELECTRIC ASSOCIATION had a capitalization ratio of 16.00 percent in our test, equal to 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 estimate the impact 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 extensive holdings of these types of assets may eventually be forced to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

NEBRASKA RURAL ELECTRIC ASSOCIATION beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

NEBRASKA RURAL ELECTRIC ASSOCIATION fell short of the national average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

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, higher 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.