Safe and Sound

SOUND

TACOMA, WA
5
Star Rating
TACOMA, WA-based SOUND is an NCUA-insured credit union founded in 1940. Regulatory filings show the credit union having $1.46 billion in assets, as of December 31, 2017.

Members have $1.09 billion on deposit tended by 268 full-time employees. With that footprint, the credit union currently holds loans and leases worth $1.09 billion. Its 120,258 members currently have $1.25 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUND exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is important. It acts as a buffer against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

SOUND did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 16 out of a possible 30 points.

SOUND had a capitalization ratio of 16.00 percent in our test, equal to the average for all credit unions, an indication that it's right in line with its peers.

Asset Quality Score

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

Having a large number of these kinds of assets suggests a credit union could eventually have to use capital to cover 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, decreasing earnings and increasing the risk of a future failure.

SOUND did better than the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its safety and soundness. Earnings can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

SOUND scored 20 out of a possible 30 on Bankrate's earnings test, exceeding the national average of 10.11.

One indication that SOUND is beating its peers in this area was its earnings ratio of 0.00 percent in our test, better 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.