Safe and Sound

ARBOR FINANCIAL

KALAMAZOO, MI
4
Star Rating
ARBOR FINANCIAL is a KALAMAZOO, MI-based, NCUA-insured credit union started in 1935. As of December 31, 2017, the credit union held assets of $523.7 million.

With 130 full-time employees, the credit union currently holds loans and leases worth $417.3 million. Its 38,029 members currently have $414.1 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is essential. It acts as a cushion against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is better.

ARBOR FINANCIAL scored below the national average of 15.65 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

ARBOR FINANCIAL had a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

A credit union with large numbers of these types of assets could eventually be forced to use capital to cover losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and increasing the chances of a future failure.

ARBOR FINANCIAL scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

A lower-than-average ratio of problem 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 has an effect on its safety and soundness. Earnings can 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 tough times. Conversely, losses reduce a credit union's ability to do those things.

ARBOR FINANCIAL scored 18 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.11.

One sign that ARBOR FINANCIAL is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.