Safe and Sound

CUMBERLAND MUNICIPAL EMPLOYEES

Cumberland, RI
5
Star Rating
Cumberland, RI-based CUMBERLAND MUNICIPAL EMPLOYEES is an NCUA-insured credit union started in 1962. The credit union has assets of $6.8 million, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union currently holds loans and leases worth $2.3 million. Its 1,203 members currently have $5.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CUMBERLAND MUNICIPAL EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial resilience. It acts as a cushion against losses and affords protection for members during times of financial trouble for the credit union. 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, CUMBERLAND MUNICIPAL EMPLOYEES achieved a score of 30 out of a possible 30 points, exceeding the national average of 15.65.

CUMBERLAND MUNICIPAL EMPLOYEES appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact 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, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and elevating the chances of a future failure.

On Bankrate's test of asset quality, CUMBERLAND MUNICIPAL EMPLOYEES scored 40 out of a possible 40 points, above the national average of 38.09 points.

CUMBERLAND MUNICIPAL EMPLOYEES's ratio of troubled assets was 0.00 percent 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 earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, are less able to do those things.

CUMBERLAND MUNICIPAL EMPLOYEES scored 2 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 10.11.

One indication that the credit union is outperforming 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.