Safe and Sound

COMMUNITY WEST

KENTWOOD, MI
4
Star Rating
Started in 1967, COMMUNITY WEST is an NCUA-insured credit union based in KENTWOOD, MI. The credit union has assets of $184.7 million, according to June 30, 2017, regulatory filings.

With 58 full-time employees, the credit union currently holds loans and leases worth $143.0 million. Its 23,039 members currently have $155.3 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, COMMUNITY WEST exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to grade U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial resilience, capital is essential. From a safety and soundness perspective, the more capital, the better.

COMMUNITY WEST fell below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, achieving a score of 12 out of a possible 30 points.

COMMUNITY WEST's capitalization ratio of 11.00 percent in our test was worse than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these types of assets suggests a credit union could eventually have to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the risk of a failure in the future.

On Bankrate's asset quality test, COMMUNITY WEST scored 40 out of a possible 40 points, exceeding the national average of 38.15 points.

A below-average ratio of problem assets of 6.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings may be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand financial trouble. Credit unions that are losing money, however, are less able to do those things.

COMMUNITY WEST scored 10 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.31.

One indication that the credit union is running ahead of its peers in this area was its earnings ratio of 4.00 percent in our test, better than 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.