Safe and Sound

CREDIT UNION ONE

Ferndale, MI
4
Star Rating
Ferndale, MI-based CREDIT UNION ONE is an NCUA-insured credit union founded in 1938. The credit union has assets of $1.14 billion, according to December 31, 2017, regulatory filings.

With 300 full-time employees, the credit union has amassed loans and leases worth $851.4 million. CREDIT UNION ONE's 131,440 members currently have $1.01 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CREDIT UNION ONE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an a credit union's financial stability, capital is essential. When looking at safety and soundness, the more capital, the better.

CREDIT UNION ONE finished below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

CREDIT UNION ONE's capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, 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 may eventually require a credit union to use capital to cover losses, diminishing 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, resulting in lower earnings and potentially more risk of a future failure.

CREDIT UNION ONE exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

CREDIT UNION ONE's ratio of troubled assets was 0.00 percent in our test, less than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's earnings test, CREDIT UNION ONE scored 14 out of a possible 30, better than the national average of 10.11.

The credit union 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.