Safe and Sound

CONSTRUCTION

BINGHAM FARMS, MI
4
Star Rating
CONSTRUCTION is an NCUA-insured credit union started in 1974 and currently headquartered in BINGHAM FARMS, MI. The credit union holds assets of $21.6 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 4 full-time employees, the credit union currently holds loans and leases worth $7.9 million. Its 1,875 members currently have $18.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CONSTRUCTION exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial fortitude. It acts as a cushion against losses and provides protection for members during times of economic trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

CONSTRUCTION racked up 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating out the national average of 15.65.

CONSTRUCTION appears to be on more solid financial footing than its peers, with a capitalization ratio of 20.00 percent in our test, higher than the average for all credit unions.

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 problem assets, such as unpaid loans.

A credit union with large numbers of these kinds of assets could eventually be forced to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, CONSTRUCTION scored 40 out of a possible 40 points, above 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 superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic shocks. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's earnings test, CONSTRUCTION scored 0 out of a possible 30, failing to reach the national average of 10.11.

One indication that CONSTRUCTION is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher than 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.