Safe and Sound

DANVERS MUNICIPAL

Danvers, MA
5
Star Rating
Founded in 1961, DANVERS MUNICIPAL is an NCUA-insured credit union headquartered in Danvers, MA. The credit union has assets of $7.7 million, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union holds loans and leases worth $3.3 million. Its 1,233 members currently have $5.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DANVERS MUNICIPAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important 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

When it comes to measuring a credit union's financial stability, capital is important. It acts as a buffer against losses and affords protection for members during times of financial instability for the credit union. When it comes to safety and soundness, the more capital, the better.

DANVERS MUNICIPAL exceeded the national average of 15.65 points on our test to measure capital adequacy, scoring 30 out of a possible 30 points.

DANVERS MUNICIPAL had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, a sign that it's more well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due 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 means a credit union could have to use capital to absorb losses, reducing its buffer of equity. 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 chances of a failure in the future.

DANVERS MUNICIPAL did better than the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath 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 can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses reduce a credit union's ability to do those things.

DANVERS MUNICIPAL received below-average marks on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

DANVERS MUNICIPAL had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's doing better than 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.