Safe and Sound

RIVER TRACE

RICHMOND, VA
1
Star Rating
Founded in 1956, RIVER TRACE is an NCUA-insured credit union based in RICHMOND, VA. As of December 31, 2017, the credit union held assets of $23.5 million.

With 7 full-time employees, the credit union currently holds loans and leases worth $17.9 million. Its 2,982 members currently have $17.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, RIVER TRACE exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. 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 as protection for members during times of financial instability for the credit union. It follows then that when it comes to measuring an a credit union's financial resilience, capital is essential. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, RIVER TRACE received a score of 6 out of a possible 30 points, coming in below the national average of 15.65.

RIVER TRACE had a capitalization ratio of 6.00 percent in our test, lower than the average for all credit unions, an indication that it's on less solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, diminishing its equity buffer. 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, pushing down earnings and elevating the chances of a failure in the future.

RIVER TRACE scored 36 out of a possible 40 points on Bankrate's test of asset quality, lower than the national average of 38.09.

A below-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

A credit union's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses lessen a credit union's ability to do those things.

RIVER TRACE did below-average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

RIVER TRACE had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's doing better than 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.