WHAT IS
SAFE AND SOUND?
Capital is an essential measurement of a credit union's financial fortitude. It acts as a bulwark against losses and provides protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.
SPARTAN achieved a score of 16 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.
SPARTAN had a capitalization ratio of 16.00 percent in our test, identical the average for all credit unions, a sign that it's running neck and neck with its peers.
In this test, Bankrate tries to estimate the effect of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.
A credit union with large numbers of these types of assets could eventually have to use capital to cover losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and elevating the risk of a failure in the future.
SPARTAN scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.
A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money are less able to do those things.
SPARTAN received above-average marks on Bankrate's earnings test, achieving a score of 16 out of a possible 30.
One sign that SPARTAN 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.
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.
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.