Safe and Sound

ALCOA MUNICIPAL EMPLOYEES

ALCOA, TN
4
Star Rating
ALCOA MUNICIPAL EMPLOYEES is an NCUA-insured credit union started in 1971 and currently headquartered in ALCOA, TN. Regulatory filings show the credit union having $5.7 million in assets, as of December 31, 2017.

Its 1,132 members currently have $5.0 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $2.5 million.

Overall, Bankrate believes that, as of December 31, 2017, ALCOA MUNICIPAL EMPLOYEES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three major criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members during periods of financial trouble for the credit union. It follows then that an institution's level of capital is a key measurement of its financial strength. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, ALCOA MUNICIPAL EMPLOYEES received a score of 14 out of a possible 30 points, below the national average of 15.65.

ALCOA MUNICIPAL EMPLOYEES appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

Having large numbers of these types of assets could eventually force a credit union to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

ALCOA MUNICIPAL EMPLOYEES scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.09.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially 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 test of earnings, ALCOA MUNICIPAL EMPLOYEES scored 6 out of a possible 30, failing to reach the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication 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.