Safe and Sound

WAYNE-WESTLAND

Westland, MI
4
Star Rating
WAYNE-WESTLAND is an NCUA-insured credit union founded in 1948 and currently based in Westland, MI. The credit union holds $99.5 million in assets, according to June 30, 2017, regulatory filings.

With 28 full-time employees, the credit union has amassed loans and leases worth $37.2 million. Its 11,192 members currently have $90.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, WAYNE-WESTLAND exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during times of economic instability for the credit union. It follows then that when it comes to measuring an an institution's financial strength, capital is key. When it comes to safety and soundness, more capital is better.

On our test to measure capital adequacy, WAYNE-WESTLAND received a score of 8 out of a possible 30 points, coming in below the national average of 15.26.

WAYNE-WESTLAND had a capitalization ratio of 9.00 percent in our test, below 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 determine the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a future failure.

WAYNE-WESTLAND scored 36 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.15.

A higher-than-average ratio of troubled assets of 8.00 percent in our test was a potential area of concern for the credit union.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's earnings test, WAYNE-WESTLAND scored 14 out of a possible 30, better than the national average of 10.31.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 6.00 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.