Safe and Sound

CENTRICITY

HERMANTOWN, MN
4
Star Rating
HERMANTOWN, MN-based CENTRICITY is an NCUA-insured credit union founded in 1943. As of December 31, 2017, the credit union held assets of $139.2 million.

Members have $96.8 million on deposit tended by 48 full-time employees. With that footprint, the credit union has amassed loans and leases worth $96.8 million. CENTRICITY's 16,664 members currently have $123.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CENTRICITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is key. It works as a buffer against losses and affords protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the more capital, the better.

CENTRICITY finished below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 14 out of a possible 30 points.

CENTRICITY had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due loans.

Having a large number of these kinds of assets may eventually require a credit union to use capital to absorb losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a failure in the future.

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

A below-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 affects its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

CENTRICITY scored 12 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's outperforming 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.