Safe and Sound

CHELSEA EMPLOYEES

CHELSEA, MA
3
Star Rating
CHELSEA, MA-based CHELSEA EMPLOYEES is an NCUA-insured credit union founded in 1935. The credit union has $13.9 million in assets, according to December 31, 2017, regulatory filings.

Members have $7.5 million on deposit tended by 3 full-time employees. With that footprint, the credit union has amassed loans and leases worth $7.5 million. CHELSEA EMPLOYEES's 2,076 members currently have $12.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHELSEA EMPLOYEES exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members during times of financial trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is important. When it comes to safety and soundness, more capital is better.

CHELSEA EMPLOYEES received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

CHELSEA EMPLOYEES's capitalization ratio of 10.00 percent in our test was worse than the average for all credit unions, a sign that it's weaker 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 may eventually force a credit union to use capital to absorb losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

CHELSEA EMPLOYEES scored 36 out of a possible 40 points on Bankrate's test of asset quality, coming in below the national average of 38.09.

Troubled assets made up 0.00 percent of CHELSEA EMPLOYEES's total assets in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand financial trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

CHELSEA EMPLOYEES received below-average marks on Bankrate's test of earnings, achieving a score of 4 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, suggesting 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.