Safe and Sound

MADCO

EDWARDSVILLE, IL
3
Star Rating
Founded in 1982, MADCO is an NCUA-insured credit union based in EDWARDSVILLE, IL. As of June 30, 2017, the credit union had assets of $1.7 million.

The credit union has amassed loans and leases worth $637,355. Its 561 members currently have $1.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, MADCO exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

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

MADCO fell below the national average of 15.26 on our test to measure capital adequacy, achieving a score of 10 out of a possible 30 points.

MADCO appears to be weaker than its peers in this area, with a capitalization ratio of 9.00 percent in our test, worse than the average for all credit unions.

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 past-due mortgages.

Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

MADCO scored 36 out of a possible 40 points on Bankrate's test of asset quality, failing to reach the national average of 38.15.

MADCO's ratio of troubled assets was 12.00 percent in our test, above the national average and a potential area of concern.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand economic shocks. Losses, on the other hand, reduce a credit union's ability to do those things.

MADCO fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

MADCO had an earnings ratio of -14.00 percent in our test, lower than the average for all credit unions, suggesting that it's running behind 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.