Safe and Sound

COMMUNITY PROMISE

KALAMAZOO, MI
1
Star Rating
COMMUNITY PROMISE is an NCUA-insured credit union founded in 2012 and currently headquartered in KALAMAZOO, MI. The credit union has $810,712 in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 5 full-time employees, the credit union has amassed loans and leases worth $540,405. Its 663 members currently have $359,544 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, COMMUNITY PROMISE exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing economic trouble. Therefore, an institution's level of capital is a useful measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

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

COMMUNITY PROMISE's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

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

Having a large number of these kinds of assets suggests a credit union could have to use capital to absorb losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a failure in the future.

COMMUNITY PROMISE scored 20 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 38.09.

COMMUNITY PROMISE's ratio of problem assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, COMMUNITY PROMISE scored 0 out of a possible 30, falling short of the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.