Overview of WealthCU

WealthCU has been operating for 64 years, having first been established in the year 1958. The credit union mainly focuses on the provision of mortgages and lines of credit which represent 56% of its loans outstanding. In terms of its overall asset base, WealthCU is larger than 88% of credit unions in the country. Unlike banks, credit unions like WealthCU are not insured by the Federal Deposit Insurance Corporation (FDIC) but instead receive deposit insurance from the National Credit Union Administration (NCUA), which operates in a similar fashion to the FDIC. The company has a total of 4 branches and employs a total of 102 employees.

Overview of the Credit Union’s Assets and Liabilities

Some of the key components of the credit union’s balance sheet are total assets of $659 million, total loans extended to customers of $599 million and customer deposits of $428 million. The average credit union in WealthCU’s peer set has a loan to deposit ratio of approximately 74%. In comparison, WealthCU has a loan to deposit ratio of 71% which is clearly lower than the peer set. A lower ratio is generally better as it indicates that the lending activities of a credit union are more comfortably covered by its deposit base. Deposits are often the most cost effective source of funding for banks and credit unions. Lastly, WealthCU’s loan portfolio mainly consists of mortgages and lines of credit and auto loans which represent 56% and 25% of its loan book and had outstanding balances of $239 million and $108 million, respectively.

Contact and Other Helpful Information

  • Main Office Address: 5890 Silver Creek Valley Rd, San Jose, CA 95138
  • Website: http://www.wealthcu.org
  • Phone: (408) 531-3100
  • Charter Number: 61741
  • Charter Year: 1958
  • Employees: 102
  • Routing Number: 321176794
  • Membership: The credit union has a membership base of 40,748 which is smaller than the average credit union operating within the state. Credit unions in California each have on average 47,657 members. Over the past three years, the credit union’s total base of members has increased by 7%.

WealthCU: Financial Overview

wealthcu-balance-sheet-metrics

Detailed above is a chart showing the progression of four important balance sheet items over the past year for WealthCU. Assets and total loans for the credit union have grown by 10.5% and expanded by 5.5%, respectively. In addition, the company’s mortgages and lines of credit, which as noted earlier is the largest portion of the loan book, has grown by 31.5%. Lastly, the credit union’s deposits have increased by 17.4%. ‘Net worth’ is a good way to assess the long-term performance of a credit union as it represents the accumulated value of the entity over time. Importantly this is value that accrues to the credit union’s owners: its members. WealthCU has a total net worth of $57 million. This implies that the credit union has a net worth per member of $1,411 which is below the national average of $1,606.

Overview of the Credit Union’s Performance Metrics

wealthcu-selected-performance-metrics

The above chart shows some of the important metrics we look at when assessing a credit union, and compares these to the average credit union of comparable size. It also shows how these metrics have fared over the past year. If we take a look at WealthCU’s return on assets – which is usually a good measure of how efficiently a company is using its assets to produce profits – we see that the credit union is below the average comparable credit union and also that over the past year ROA has improved substantially given the year over year change of 0.23%. We look at the delinquency rate within a loan portfolio as a way to assess the performance and quality of a credit union’s loan book. A lower delinquency rate indicates a better performing portfolio. WealthCU has a delinquency rate that is approximately inline with its peer group average and when compared with the prior year, we can see that it has deteriorated. The net worth ratio for the credit union is 8.7% and has declined compared with the prior year figure of 9.3%. The credit union is also below its peer group average of 9.8% on this metric. Finally, based on the NCUA guidelines, the company’s net worth ratio would classify it as well capitalized.

Conclusion

Overall, we believe WealthCU deserves a rating of 2.4 out of 5.0, which is average. Importantly, please be aware that none of the information presented is meant to be investment advice or advice of any form. All of the information and views expressed in this note and on this site are purely for informational purposes.