Safe and Sound

ALLEGAN COMMUNITY

ALLEGAN, MI
4
Star Rating
ALLEGAN COMMUNITY is an NCUA-insured credit union founded in 1945 and currently based in ALLEGAN, MI. The credit union holds $38.9 million in assets, according to December 31, 2017, regulatory filings.

With 20 full-time employees, the credit union holds loans and leases worth $23.3 million. ALLEGAN COMMUNITY's 6,643 members currently have $34.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ALLEGAN COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial strength. It acts as a bulwark against losses and as protection for members when a credit union is experiencing financial trouble. When looking at safety and soundness, the more capital, the better.

ALLEGAN COMMUNITY finished 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.

ALLEGAN COMMUNITY's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

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 troubled assets, such as unpaid loans.

Having a large number of these types of assets means a credit union could have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, pushing down earnings and elevating the risk of a future failure.

ALLEGAN COMMUNITY scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.

The credit union's ratio of troubled assets was 0.00 percent in our test, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

ALLEGAN COMMUNITY scored 4 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.11.

One indication that ALLEGAN COMMUNITY is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.