Safe and Sound

SLO

San Luis Obispo, CA
4
Star Rating
SLO is a San Luis Obispo, CA-based, NCUA-insured credit union started in 1953. The credit union has $33.1 million in assets, according to December 31, 2017, regulatory filings.

With 6 full-time employees, the credit union holds loans and leases worth $3.1 million. Its 1,824 members currently have $27.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SLO exhibited a good condition, earning 4 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 grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members when a credit union is experiencing financial trouble. It follows then that when it comes to measuring an an institution's financial fortitude, capital is useful. When it comes to safety and soundness, more capital is preferred.

SLO exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, scoring 22 out of a possible 30 points.

SLO's capitalization ratio of 22.00 percent in our test was above the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

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

Having extensive holdings of these types of assets suggests a credit union could have to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

SLO scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

Earnings score

A credit union's profitability has an effect on its safety and soundness. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Conversely, losses diminish a credit union's ability to do those things.

SLO scored 0 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's outperforming 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.