Safe and Sound

ARLINGTON MUNICIPAL

ARLINGTON, MA
5
Star Rating
Founded in 1954, ARLINGTON MUNICIPAL is an NCUA-insured credit union headquartered in ARLINGTON, MA. Regulatory filings show the credit union having assets of $9.7 million, as of December 31, 2017.

ARLINGTON MUNICIPAL's 1,072 members currently have $7.8 million in shares with the credit union. With that footprint, the credit union holds loans and leases worth $5.1 million.

Overall, Bankrate believes that, as of December 31, 2017, ARLINGTON MUNICIPAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to score U.S. 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 an institution's financial resilience, capital is valuable. It works as a cushion against losses and as protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, ARLINGTON MUNICIPAL racked up 30 out of a possible 30 points, exceeding the national average of 15.65.

ARLINGTON MUNICIPAL's capitalization ratio of 30.00 percent in our test was higher than the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these types of assets means a credit union may eventually have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, decreasing earnings and increasing the risk of a failure in the future.

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

Troubled assets made up 0.00 percent of ARLINGTON MUNICIPAL's total assets in our test, below the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, diminish a credit union's ability to do those things.

ARLINGTON MUNICIPAL did below-average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

One indication that ARLINGTON MUNICIPAL is doing better than 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.