SAFE & SOUND® STAR RATINGS™
Memorandum on findings
P.O. Box 6430
Saginaw, MI 48608STAR RATING:
Credit Union ID 61657
A credit union is a nonprofit, cooperative financial institution,
owned and administered by individual members, who must meet
eligibility requirements to join. Credit unions pay no federal
income tax. Community development credit unions are chartered to
serve the needs of low income members who reside in financially
distressed or under-served communities.
The Bankrate proprietary credit union rating model analyzes capitalization, asset quality, earnings, and liquidity to produce composite and component "Star" ratings that can be used as a measure of the rated entity's financial safety and soundness. Additionally, early warning components of the model highlight operating characteristics of immediate concern and recommended follow-up actions.
The analyses are not adjusted for TARP funding and those institutions receiving funds may receive ratings that would differ were the TARP funds adjusted out of the analyses. You can check whether or not this institution has received TARP funding and whether or not they have paid it back at http://bailout.propublica.org/main/list/index
Capitalization stands as protection against loss for credit union members, creditors and, if applicable, the insurer. Regulators place a high degree of importance upon assessments of capitalization.
Net Capital / Assets
||8.88||Approximates Peer Norm|
Capital (1) / Assets
||9.45||Below Peer Norm|
(1) Includes loan loss allowance.
Asset quality highlights
Asset quality is a major determinant of the viability of any banking
institution. Poor asset quality will have a very direct impact upon other
components and regulators invest substantial amounts of time and
resources in gauging the quality of loans and investments.
|Nonperforming Asset Ratio (2)||6.30||Relatively Low|
|Loss Reserve Coverage (3)||131.92||Much Better Than Normal|
Asset Growth Rate
(2) Nonperforming Assets/Equity plus Loss Reserves
(3) Loan Loss reserves/Delinquent Loans
Component star rating:
A credit union's profitability is critical to building capital and establishing adequate loss
Return on Average Assets
Overhead / Average Assets
||3.24||Higher Than Average|
Note: The earnings assessment is based on the latest four quarters of income and expense.
Component star rating:
Liquidity provides funding for normal operations and represents a reserve for
|Balance Sheet Liquidity||5.29||Below average|
Early warning highlights
Early warning indicators identify areas of potential concern, which may lead to financial
deterioration and thus, require inquiry or in depth investigation.
For this institution we have noted:
- No operating characteristics requiring specific follow-up
Institution CommentaryOVERVIEW of Institution
UNITED FINANCIAL is a
chartered credit union, which, as of
reported total assets of approximately $173.9771 million. At that
date, loans and deposits held by the institution amounted to $104.6981 million
and $156.1502 million,
respectively. Equity, the difference between a credit union's total assets and total liabilities, was
determined to have been
$15.4438 million, which was 8.88% of total assets.COMPOSITE SUMMARY
Bankrate believes that, as of
this credit union exhibited a sound condition, characterized by
a very high measure of asset quality,
lower than normal profitability, and
lower than normal liquidity.CAPITAL ANALYSIS
For the one year period ended
this credit union reported
a below normal rate of
growth in equity capital.
Balance sheet structural changes, through the one year period of time ended
the institution's capital position.
Our analytical methodology does take into account the quantity,
quality, durability, and direction of net worth, and, as set forth above, we have determined, based upon
our series of tests, that this credit union demonstrates
ASSET QUALITY ANALYSIS
The institution reveals, as previously stated, a very high measure of
asset quality. That conclusion incorporates our analysis
of data depicting regional economic conditions as well as our computations of
a relatively low
2013 nonperforming asset ratio and
much better than normal
reserve coverage for nonperforming loans.
Credit card lending activities should not, based on our analysis of asset
quality trends and conditions, have a substantial negative impact upon
For the year ended
this institution recorded a
of $923.24 thousand, which represented a return on average assets
(ROA) of 0.53%. Year earlier four quarter results amounted to a
of $153,515, or a
ROA. ROA is the key measurement of profitability within the credit union industry,
and the industry's ROA, for the
twelve months ended December 31,
We have concluded that, for the four quarters ending
the institution achieved a below average
return on average assets.
A higher than average overhead ratio is in evidence.
We have noted that the insitution's profitability performance, between the twelve months ending
, 2012 and the twelve months ending
exceeded the industry peer comparison.
2013, the institution displayed
balance sheet liquidity.
Accounting principles require some securities to be categorized as "Available-for-Sale." Changes in market value of these securities are reflected through the GAAP (Generally Accepted Accounting Principles) net worth of the institution.
Based upon the credit union's present balance sheet, changes in the value of the current level of securities reported as might not have a substantial impact upon future net worth of the credit union.
This credit union has been rated
Negative factors that impacted that rating follow:
Positive factors that impacted that rating follow:
As stated, we have determined a Composite Star rating for this credit union of
, indicative of a
sound financial condition. At times, conditions
of financial institutions change rapidly and significantly. Hence, our Safe & Sound Star ratings
should not be deemed predictive of likely future ratings. However, in view of early warning
indicators set forth within this report, in combination with the institution's
financial data, we believe that the Star rating for this institution is
unlikely to change
within the ensuing twelve month period.