Safe and Sound

BARABOO MUNICIPAL EMPLOYEES

BARABOO, WI
4
Star Rating
BARABOO, WI-based BARABOO MUNICIPAL EMPLOYEES is an NCUA-insured credit union founded in 1985. As of June 30, 2017, the credit union held assets of $1.9 million.

The credit union has amassed loans and leases worth $897,239. Its 574 members currently have $1.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, BARABOO MUNICIPAL EMPLOYEES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is useful. It acts as a buffer 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.

On our test to measure the adequacy of a credit union's capital, BARABOO MUNICIPAL EMPLOYEES racked up 26 out of a possible 30 points, exceeding the national average of 15.26.

BARABOO MUNICIPAL EMPLOYEES had a capitalization ratio of 17.00 percent in our test, higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

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

Having extensive holdings of these types of assets means a credit union may have to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

BARABOO MUNICIPAL EMPLOYEES scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.15.

A below-average ratio of problem assets of 3.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better able to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, BARABOO MUNICIPAL EMPLOYEES scored 0 out of a possible 30, coming in below the national average of 10.31.

One sign that BARABOO MUNICIPAL EMPLOYEES is performing behind its peers in this area was its earnings ratio of -3.00 percent in our test, below 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.