Safe and Sound

GLOUCESTER MUNICIPAL

Gloucester, MA
5
Star Rating
Founded in 1941, GLOUCESTER MUNICIPAL is an NCUA-insured credit union based in Gloucester, MA. Regulatory filings show the credit union having $2.0 million in assets, as of December 31, 2017.

Its 524 members currently have $1.6 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $510,919.

Overall, Bankrate believes that, as of December 31, 2017, GLOUCESTER MUNICIPAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during times of financial trouble for the credit union. Therefore, an institution's level of capital is an important measurement of its financial fortitude. When it comes to safety and soundness, more capital is better.

GLOUCESTER MUNICIPAL achieved a score of 30 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating out the national average of 15.65.

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

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves 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 absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, diminishing earnings and increasing the chances of a failure in the future.

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

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

GLOUCESTER MUNICIPAL scored 2 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 10.11.

GLOUCESTER MUNICIPAL had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.