Safe and Sound

SWEDISH AMERICAN

ROCKFORD, IL
4
Star Rating
ROCKFORD, IL-based SWEDISH AMERICAN is an NCUA-insured credit union founded in 1972. As of December 31, 2017, the credit union held assets of $4.7 million.

Its 1,573 members currently have $4.3 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $1.2 million.

Overall, Bankrate believes that, as of December 31, 2017, SWEDISH AMERICAN exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is essential. It works as a buffer against losses and affords protection for members when a credit union is experiencing financial trouble. When it comes to safety and soundness, the higher the capital, the better.

SWEDISH AMERICAN fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 10 out of a possible 30 points.

SWEDISH AMERICAN had a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due loans.

Having a large number of these types of assets may eventually require a credit union to use capital to absorb losses, reducing 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, diminishing earnings and elevating the risk of a failure in the future.

SWEDISH AMERICAN scored above the national average of 38.09 on Bankrate's test of asset quality, racking up 40 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 potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

SWEDISH AMERICAN fell short of the national average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One sign that SWEDISH AMERICAN is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.