WHAT IS
SAFE AND SOUND?
Capital works as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. Therefore, a credit union's level of capital is a crucial measurement of its financial strength. When looking at safety and soundness, the higher the capital, the better.
On our test to measure capital adequacy, RIVERVIEW scored 20 out of a possible 30 points, beating out the national average of 15.65.
RIVERVIEW appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 20.00 percent in our test, better than the average for all credit unions.
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 large numbers of these kinds of assets could eventually be forced to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a future failure.
RIVERVIEW scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.
A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
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, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.
RIVERVIEW scored 4 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.
RIVERVIEW had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of its peers in this area.
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.
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.