Safe and Sound

AEROQUIP

JACKSON, MI
5
Star Rating
JACKSON, MI-based AEROQUIP is an NCUA-insured credit union started in 1949. The credit union has $44.7 million in assets, according to December 31, 2017, regulatory filings.

With 14 full-time employees, the credit union holds loans and leases worth $25.3 million. Its 4,168 members currently have $37.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AEROQUIP exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an an institution's financial fortitude, capital is key. When it comes to safety and soundness, more capital is preferred.

AEROQUIP achieved a score of 22 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating the national average of 15.65.

AEROQUIP appears to be on more solid financial footing than its peers, with a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets may eventually force a credit union to use capital to cover losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, decreasing earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, AEROQUIP scored 40 out of a possible 40 points, above the national average of 38.09 points.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's test of earnings, AEROQUIP scored 10 out of a possible 30, falling short of the national average of 10.11.

AEROQUIP had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's doing better than 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.