Safe and Sound

STERLING UNITED

EVANSVILLE, IN
3
Star Rating
EVANSVILLE, IN-based STERLING UNITED is an NCUA-insured credit union founded in 1956. The credit union holds assets of $71.3 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 24 full-time employees, the credit union has amassed loans and leases worth $54.0 million. Its 10,856 members currently have $60.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, STERLING UNITED exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial strength. It works as a buffer against losses and as protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, the more capital, the better.

STERLING UNITED fell short of the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 10 out of a possible 30 points.

STERLING UNITED's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

A credit union with a large number of these types of assets could eventually be forced to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, reducing earnings and elevating the risk of a failure in the future.

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

Troubled assets made up 0.00 percent of STERLING UNITED's total assets in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand economic trouble. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, STERLING UNITED scored 2 out of a possible 30, falling short of the national average of 10.11.

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