Safe and Sound

SOUTHERNMOST

KEY WEST, FL
5
Star Rating
SOUTHERNMOST is a KEY WEST, FL-based, NCUA-insured credit union started in 1954. As of December 31, 2017, the credit union had assets of $14.6 million.

Members have $8.3 million on deposit tended by 5 full-time employees. With that footprint, the credit union currently holds loans and leases worth $8.3 million. Its 1,917 members currently have $11.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHERNMOST exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial resilience, capital is key. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, SOUTHERNMOST scored 30 out of a possible 30 points, better than the national average of 15.65.

SOUTHERNMOST's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, suggesting that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

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

A credit union with large numbers of these types of assets could eventually be forced to use capital to cover losses, reducing its buffer 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 failure in the future.

On Bankrate's test of asset quality, SOUTHERNMOST scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

SOUTHERNMOST scored 2 out of a possible 30 on Bankrate's earnings test, less than the national average of 10.11.

SOUTHERNMOST had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's doing better than 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.