Safe and Sound

MCPHERSON CO-OP

McPherson, KS
3
Star Rating
McPherson, KS-based MCPHERSON CO-OP is an NCUA-insured credit union started in 1946. The credit union holds assets of $32.7 million, according to December 31, 2017, regulatory filings.

With 9 full-time employees, the credit union currently holds loans and leases worth $24.0 million. MCPHERSON CO-OP's 3,178 members currently have $29.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MCPHERSON CO-OP exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during times of financial trouble for the credit union. Therefore, when it comes to measuring an an institution's financial resilience, capital is key. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, MCPHERSON CO-OP received a score of 10 out of a possible 30 points, below the national average of 15.65.

MCPHERSON CO-OP's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

MCPHERSON CO-OP scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money are less able to do those things.

MCPHERSON CO-OP scored 2 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 10.11.

One sign that the credit union is running ahead of 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.