Safe and Sound

4FRONT

Traverse City, MI
4
Star Rating
4FRONT is an NCUA-insured credit union started in 1954 and currently headquartered in Traverse City, MI. Regulatory filings show the credit union having $488.7 million in assets, as of December 31, 2017.

With 147 full-time employees, the credit union currently holds loans and leases worth $374.4 million. Its 73,284 members currently have $422.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, 4FRONT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is an important measurement of its financial strength. From a safety and soundness perspective, the more capital, the better.

4FRONT scored below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 12 out of a possible 30 points.

4FRONT's capitalization ratio of 12.00 percent in our test was less than the average for all credit unions, an indication that it's less well prepared for financial trouble than its peers.

Asset Quality Score

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

A credit union with a large number of these types of assets may eventually be forced to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

4FRONT did better than the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial shocks. Conversely, losses diminish a credit union's ability to do those things.

4FRONT received above-average marks on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

4FRONT had an earnings ratio of 0.00 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.