Safe and Sound

SOUTHLAND

LOS ALAMITOS, CA
4
Star Rating
Founded in 1944, SOUTHLAND is an NCUA-insured credit union headquartered in LOS ALAMITOS, CA. The credit union has $742.2 million in assets, according to December 31, 2017, regulatory filings.

With 129 full-time employees, the credit union holds loans and leases worth $507.6 million. SOUTHLAND's 59,092 members currently have $647.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHLAND exhibited a good condition, earning 4 out of 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 grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members during periods of economic trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial strength, capital is valuable. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, SOUTHLAND received a score of 14 out of a possible 30 points, less than the national average of 15.65.

SOUTHLAND had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

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

Having large numbers of these types of assets could eventually require a credit union to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, less than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand financial trouble. However, credit unions that are losing money have less ability to do those things.

SOUTHLAND received below-average marks on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One sign that the credit union 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.