Safe and Sound

CHEMCO

MC INTOSH, AL
5
Star Rating
MC INTOSH, AL-based CHEMCO is an NCUA-insured credit union founded in 1953. As of December 31, 2017, the credit union had assets of $5.1 million.

The credit union currently holds loans and leases worth $2.4 million. Its 416 members currently have $4.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHEMCO exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is useful. When it comes to safety and soundness, more capital is preferred.

CHEMCO achieved a score of 22 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating the national average of 15.65.

CHEMCO appears to be stronger than its peers, with a capitalization ratio of 22.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these types of assets could eventually be required to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, reducing earnings and elevating the chances of a future failure.

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

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

CHEMCO fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

CHEMCO had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.