Safe and Sound

ALPENA-ALCONA AREA

ALPENA, MI
5
Star Rating
Founded in 1953, ALPENA-ALCONA AREA is an NCUA-insured credit union headquartered in ALPENA, MI. Regulatory filings show the credit union having $332.0 million in assets, as of December 31, 2017.

Thanks to the efforts of 76 full-time employees, the credit union currently holds loans and leases worth $178.8 million. ALPENA-ALCONA AREA's 28,640 members currently have $293.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ALPENA-ALCONA AREA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is valuable. It works as a bulwark against losses and provides protection for members during times of financial trouble for the credit union. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, ALPENA-ALCONA AREA received a score of 12 out of a possible 30 points, lower than the national average of 15.65.

ALPENA-ALCONA AREA appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid mortgages, 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 could eventually force a credit union to use capital to cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and increasing the risk of a future failure.

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

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

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 deal with problematic loans, potentially making the credit union better able to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

ALPENA-ALCONA AREA did above-average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

The credit union 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.