|
A Look At UIECU Financial Performance
Recent coverage in The News-Gazette referenced a change in the U of I Employees Credit Union’s rating from BauerFinancial, Inc. from a Five-Star (Superior) to a Four-Star (Excellent) rating as of March 31, 2009. Financial institutions with either a Five-Star or Four-Star rating appear on Bauer’s “Recommended” Report. In fact, the credit union’s financial performance has earned a “Recommended” status from BauerFinancial for 67 consecutive quarters, dating back to the fourth quarter of 1992.
BauerFinancial, Inc. has been analyzing and reporting on the financial condition of the nation’s financial industry, both banks and credit unions since 1983. Through the years BauerFinancial has earned the reputation of “the nation’s bank rating service.” For more information about this service, please visit the BauerFinancial website.
Growth Serves New and Existing Members
Over the past 18 months, the credit union has experienced rapid growth as membership and deposits have grown. Consumers nationwide continue to seek safety and soundness in their financial institutions, resulting in more members and increasing deposits for credit unions. U of I Employees Credit Union deposits grew by almost 16% in 2008, and are growing at an even faster pace in 2009. Credit union capital stood at 8.85% as of March 31, 2009, which would be a trigger for BauerFinancial to classify a credit union as Four-Star rather than Five-Star. Their web site explains:
Recommended Credit Unions
Each of the credit unions on the BauerFinancial Recommended Credit Union Report is rated either Five-Star or Four-Star on the BauerFinancial zero-to-five-star scale. They are safe, financially sound credit unions that are operating well above their regulatory capital requirements. Each Five-Star institution on this report had a capital to assets ratio of 9% or higher. Generally, the Four-Star credit unions had capital ratios between 6% and 9%. (https://www.bauerfinancial.com/btc_ratings.asp)
Since the capital ratio is a simple calculation of total capital divided by total assets, as assets have grown, the ratio tends to decrease. (Note: “Well-capitalized” as defined by government regulators is 7.00%, a figure the U of I Employees Credit Union has continually exceeded over the past 16 years.)
Updated Status and Financial Performance
The credit union’s performance in the second quarter of 2009, along with a slower pace of growth, has resulted in the credit union’s capital level rising to 9.06% as of June 30, 2009. This would again qualify the credit union for a Five-Star rating from BauerFinancial in regard to their capital requirements The credit union has operating income above its peers in 2009, and delinquency and non-performing asset levels well below its peers as well. Ongoing operations continue to provide value to members and stability to the organization.
We appreciate our members’ continued support and confidence, and we are confident that our continued growth and adherence to high standards will continue to serve us well throughout 2009.
|
