Safe and Sound

FINANCIALEDGE COMMUNITY

Bay City, MI
4
Star Rating
Bay City, MI-based FINANCIALEDGE COMMUNITY is an NCUA-insured credit union started in 1950. As of December 31, 2017, the credit union held assets of $92.5 million.

Thanks to the work of 30 full-time employees, the credit union holds loans and leases worth $61.1 million. Its 8,934 members currently have $81.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FINANCIALEDGE COMMUNITY exhibited a good condition, earning 4 out of 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 U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial resilience, capital is useful. When it comes to safety and soundness, the more capital, the better.

FINANCIALEDGE COMMUNITY received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

FINANCIALEDGE COMMUNITY's capitalization ratio of 12.00 percent in our test was worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

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

A credit union with large numbers of these kinds of assets may eventually have to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

FINANCIALEDGE COMMUNITY scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

FINANCIALEDGE COMMUNITY scored 14 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.11.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.