Safe and Sound

FERKO MD

Frederick, MD
4
Star Rating
FERKO MD is a Frederick, MD-based, NCUA-insured credit union started in 1955. Regulatory filings show the credit union having $32.6 million in assets, as of December 31, 2017.

Thanks to the efforts of 3 full-time employees, the credit union holds loans and leases worth $10.1 million. FERKO MD's 3,752 members currently have $29.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FERKO MD exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is important. It acts as a cushion against losses and affords protection for members when a credit union is experiencing financial instability. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, FERKO MD received a score of 10 out of a possible 30 points, lower than the national average of 15.65.

FERKO MD had a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid loans.

Having lots of these kinds of assets could eventually require a credit union to use capital to absorb losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

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

The credit union's ratio of problem assets was 0.00 percent in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings may be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, have less ability to do those things.

FERKO MD scored 8 out of a possible 30 on Bankrate's earnings test, falling short of 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, a sign that it's outperforming 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.