Safe and Sound

ROUTE 1

PARIS, IL
1
Star Rating
ROUTE 1 is an NCUA-insured credit union started in 1957 and currently headquartered in PARIS, IL. As of June 30, 2017, the credit union had assets of $4.1 million.

Members have $2.2 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $2.2 million. ROUTE 1's 974 members currently have $3.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, ROUTE 1 exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is experiencing financial trouble. Therefore, a credit union's level of capital is a useful measurement of its financial fortitude. When looking at safety and soundness, the more capital, the better.

ROUTE 1 fell below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, receiving a score of 2 out of a possible 30 points.

ROUTE 1 appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 5.00 percent in our test, below the average for all credit unions.

Asset Quality Score

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

Having large numbers of these kinds of assets means a credit union could have to use capital to cover losses, shrinking 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, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, ROUTE 1 scored 12 out of a possible 40 points, lower than the national average of 38.15 points.

A higher-than-average ratio of problem assets of 58.00 percent in our test was something to watch for the credit union.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, likely making the credit union better able to withstand financial shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, ROUTE 1 scored 0 out of a possible 30, coming in below the national average of 10.31.

ROUTE 1 had an earnings ratio of -158.00 percent in our test, less than the average for all credit unions, an indication that it's performing behind 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.