Safe and Sound

COMMUNITY FINANCIAL

PLYMOUTH, MI
5
Star Rating
COMMUNITY FINANCIAL is a PLYMOUTH, MI-based, NCUA-insured credit union dating back to 1951. Regulatory filings show the credit union having assets of $856.8 million, as of December 31, 2017.

Thanks to the work of 235 full-time employees, the credit union holds loans and leases worth $793.3 million. COMMUNITY FINANCIAL's 69,212 members currently have $655.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, COMMUNITY FINANCIAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to grade American credit unions on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is useful. It works as a cushion against losses and provides protection for members when a credit union is experiencing financial trouble. When it comes to safety and soundness, more capital is better.

On our test to measure the adequacy of a credit union's capital, COMMUNITY FINANCIAL achieved a score of 16 out of a possible 30 points, beating the national average of 15.65.

COMMUNITY FINANCIAL had a capitalization ratio of 16.00 percent in our test, the same as the average for all credit unions, a sign that it's right in line with its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets suggests a credit union could eventually have to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, COMMUNITY FINANCIAL scored 36 out of a possible 40 points, below the national average of 38.09 points.

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

Earnings score

A credit union's profitability has an effect on its safety and soundness. Earnings can 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 better able to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

COMMUNITY FINANCIAL scored 18 out of a possible 30 on Bankrate's test of earnings, above the national average of 10.11.

COMMUNITY FINANCIAL had an earnings ratio of 0.00 percent in our test, better than 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.