Safe and Sound

SCOTT

EDWARDSVILLE, IL
4
Star Rating
EDWARDSVILLE, IL-based SCOTT is an NCUA-insured credit union founded in 1943. As of December 31, 2017, the credit union held assets of $1.12 billion.

With 240 full-time employees, the credit union holds loans and leases worth $932.2 million. SCOTT's 139,375 members currently have $990.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SCOTT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key 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

When it comes to measuring an institution's financial stability, capital is useful. It works as a bulwark against losses and as protection for members when a credit union is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

SCOTT finished below the national average of 15.65 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

SCOTT appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

Having a large number of these types of assets suggests a credit union could eventually have 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 thus aren't earning money, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, SCOTT scored 36 out of a possible 40 points, falling short of the national average of 38.09 points.

Troubled assets made up 0.00 percent of SCOTT's total assets in our test, lower than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

SCOTT outperformed the average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

One sign that SCOTT is beating 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.