Safe and Sound

FIRST UNITED

GRANDVILLE, MI
4
Star Rating
Started in 1937, FIRST UNITED is an NCUA-insured credit union headquartered in GRANDVILLE, MI. The credit union holds assets of $37.1 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 13 full-time employees, the credit union has amassed loans and leases worth $29.1 million. Its 5,069 members currently have $29.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST UNITED 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 American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a bulwark against losses and affords protection for members during periods of financial instability for the credit union. When it comes to safety and soundness, the higher the capital, the better.

FIRST UNITED received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

FIRST UNITED appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 10.00 percent in our test, below the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets may eventually be required to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and increasing the risk of a failure in the future.

On Bankrate's asset quality test, FIRST UNITED scored 32 out of a possible 40 points, less than the national average of 38.09 points.

FIRST UNITED's ratio of problem assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

FIRST UNITED exceeded the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.

FIRST UNITED had an earnings ratio of 0.00 percent in our test, better than 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.