Safe and Sound

DIGITAL

MARLBOROUGH, MA
5
Star Rating
DIGITAL is a MARLBOROUGH, MA-based, NCUA-insured credit union started in 1979. As of June 30, 2017, the credit union had assets of $8.07 billion.

Members have $6.61 billion on deposit tended by 1,110 full-time employees. With that footprint, the credit union holds loans and leases worth $6.61 billion. DIGITAL's 663,621 members currently have $6.56 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, DIGITAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for 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

When it comes to measuring an institution's financial fortitude, capital is essential. It acts as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, DIGITAL received a score of 10 out of a possible 30 points, coming in below the national average of 15.26.

DIGITAL's capitalization ratio of 9.00 percent in our test was lower than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having a large number of these types of assets suggests a credit union may eventually have to use capital to cover losses, decreasing its cushion 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 depressed earnings and potentially more risk of a future failure.

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

A lower-than-average ratio of problem assets of 5.00 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 making money affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's earnings test, DIGITAL scored 22 out of a possible 30, beating the national average of 10.31.

The credit union had an earnings ratio of 12.00 percent in our test, better than the average for all credit unions, a sign that it's beating its peers in this area.








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.