Safe and Sound

WEBSTER FIRST

Worcester, MA
5
Star Rating
WEBSTER FIRST is a Worcester, MA-based, NCUA-insured credit union founded in 1934. As of December 31, 2017, the credit union had assets of $901.1 million.

Thanks to the efforts of 212 full-time employees, the credit union has amassed loans and leases worth $716.1 million. Its 67,511 members currently have $677.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, WEBSTER FIRST exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial stability, capital is essential. When looking at safety and soundness, the more capital, the better.

WEBSTER FIRST scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 28 out of a possible 30 points.

WEBSTER FIRST's capitalization ratio of 28.00 percent in our test was higher than the average for all credit unions, suggesting that it's stronger than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with a large number of these kinds of assets could eventually be forced to use capital to absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

WEBSTER FIRST scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A below-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

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, WEBSTER FIRST scored 14 out of a possible 30, better than the national average of 10.11.

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.