Safe and Sound

STATE EMPLOYEES COMMUNITY

ALTON, IL
5
Star Rating
STATE EMPLOYEES COMMUNITY is an ALTON, IL-based, NCUA-insured credit union founded in 1952. The credit union holds $5.5 million in assets, according to December 31, 2017, regulatory filings.

Members have $3.2 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $3.2 million. STATE EMPLOYEES COMMUNITY's 1,028 members currently have $4.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, STATE EMPLOYEES COMMUNITY exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union did 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 works as a cushion 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 valuable. From a safety and soundness perspective, more capital is better.

STATE EMPLOYEES COMMUNITY scored 22 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.

STATE EMPLOYEES COMMUNITY appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 22.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with large numbers of these types of assets could eventually be forced to use capital to absorb 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, reducing earnings and increasing the risk of a future failure.

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

A below-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 affects its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand financial trouble. However, credit unions that are losing money have less ability to do those things.

STATE EMPLOYEES COMMUNITY exceeded the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

STATE EMPLOYEES COMMUNITY had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's beating 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.