Safe and Sound

WARREN

Waterloo, IA
5
Star Rating
WARREN is a Waterloo, IA-based, NCUA-insured credit union started in 1959. Regulatory filings show the credit union having assets of $4.7 million, as of December 31, 2017.

The credit union currently holds loans and leases worth $1.5 million. Its 835 members currently have $3.6 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial strength. It works as a cushion against losses and as protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the more capital, the better.

WARREN exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 30 out of a possible 30 points.

WARREN appears to be more resilient than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem 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 a large number of these types of assets may eventually be forced to use capital to absorb losses, shrinking 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.

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

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

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

One sign that WARREN is outperforming 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.