Safe and Sound

RAFE

Riverside, CA
1
Star Rating
RAFE is a Riverside, CA-based, NCUA-insured credit union dating back to 1963. As of June 30, 2017, the credit union held assets of $23.7 million.

Members have $17.1 million on deposit tended by 11 full-time employees. With that footprint, the credit union currently holds loans and leases worth $17.1 million. Its 4,379 members currently have $21.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, RAFE exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during times of financial trouble for the credit union. Therefore, a credit union's level of capital is a key measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, RAFE received a score of 12 out of a possible 30 points, failing to reach the national average of 15.26.

RAFE had a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

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

Having extensive holdings of these types of assets means a credit union could have to use capital to absorb losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, RAFE scored 16 out of a possible 40 points, lower than the national average of 38.15 points.

RAFE's ratio of troubled assets was 49.00 percent in our test, greater than the national average and a potential area of concern.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better able to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, RAFE scored 0 out of a possible 30, lower than the national average of 10.31.

RAFE had an earnings ratio of -41.00 percent in our test, lower than the average for all credit unions, suggesting that it's underperforming 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.