Safe and Sound

UNITED BUSINESS & INDUSTRY

Plainville, CT
3
Star Rating
UNITED BUSINESS & INDUSTRY is a Plainville, CT-based, NCUA-insured credit union started in 1951. Regulatory filings show the credit union having assets of $97.7 million, as of December 31, 2017.

Members have $72.0 million on deposit tended by 17 full-time employees. With that footprint, the credit union currently holds loans and leases worth $72.0 million. Its 11,106 members currently have $85.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UNITED BUSINESS & INDUSTRY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is key. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, UNITED BUSINESS & INDUSTRY received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

UNITED BUSINESS & INDUSTRY's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these types of assets could eventually have to use capital to cover losses, shrinking its cushion of equity. 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 chances of a failure in the future.

UNITED BUSINESS & INDUSTRY beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The credit union's ratio of problem assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. However, credit unions that are losing money have less ability to do those things.

UNITED BUSINESS & INDUSTRY received below-average marks on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.