Safe and Sound

STATE EMPLOYEES'

RALEIGH, NC
4
Star Rating
STATE EMPLOYEES' is a RALEIGH, NC-based, NCUA-insured credit union founded in 1937. As of December 31, 2017, the credit union held assets of $37.32 billion.

Thanks to the efforts of 6,450 full-time employees, the credit union holds loans and leases worth $21.69 billion. STATE EMPLOYEES''s 2,272,944 members currently have $33.92 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, STATE EMPLOYEES' exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is important. It acts as a cushion against losses and as protection for members during periods of financial instability for the credit union. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, STATE EMPLOYEES' received a score of 6 out of a possible 30 points, below the national average of 15.65.

STATE EMPLOYEES''s capitalization ratio of 6.00 percent in our test was less than the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these types of assets could eventually be forced to use capital to absorb losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

STATE EMPLOYEES' fell below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets 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 earning money has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

STATE EMPLOYEES' scored 18 out of a possible 30 on Bankrate's earnings test, beating the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting 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.