Safe and Sound

UTILITY DISTRICT

OAKLAND, CA
4
Star Rating
OAKLAND, CA-based UTILITY DISTRICT is an NCUA-insured credit union founded in 1935. As of December 31, 2017, the credit union had assets of $31.6 million.

With 6 full-time employees, the credit union currently holds loans and leases worth $9.4 million. Its 2,308 members currently have $28.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UTILITY DISTRICT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is an essential measurement of its financial strength. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, UTILITY DISTRICT received a score of 8 out of a possible 30 points, failing to reach the national average of 15.65.

UTILITY DISTRICT appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due loans.

Having a large number of these kinds of assets may eventually require a credit union to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a future failure.

UTILITY DISTRICT scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

UTILITY DISTRICT underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

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.