Safe and Sound

CREDIT UNION ADVANTAGE

SOUTHFIELD, MI
4
Star Rating
CREDIT UNION ADVANTAGE is an NCUA-insured credit union started in 1969 and currently based in SOUTHFIELD, MI. Regulatory filings show the credit union having assets of $29.4 million, as of December 31, 2017.

Members have $8.8 million on deposit tended by 8 full-time employees. With that footprint, the credit union holds loans and leases worth $8.8 million. CREDIT UNION ADVANTAGE's 2,778 members currently have $25.8 million in shares with the credit union.

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

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial resilience. It works as a buffer against losses and as protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the more capital, the better.

CREDIT UNION ADVANTAGE came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 12 out of a possible 30 points.

CREDIT UNION ADVANTAGE had a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these types of assets may eventually be required to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, pushing down earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, CREDIT UNION ADVANTAGE 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 greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the credit union better able to withstand economic shocks. Obviously, credit unions that are losing money have less ability to do those things.

CREDIT UNION ADVANTAGE scored 6 out of a possible 30 on Bankrate's earnings test, 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, better 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.