Safe and Sound

MCPHERSON COMMUNITY

Tryon, NE
2
Star Rating
MCPHERSON COMMUNITY is a Tryon, NE-based, NCUA-insured credit union dating back to 2000. As of December 31, 2017, the credit union held assets of $563,561.

Its 228 members currently have $530,031 in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $260,672.

Overall, Bankrate believes that, as of December 31, 2017, MCPHERSON COMMUNITY exhibited a below-average condition, earning 2 out of 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 grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members when a credit union is experiencing financial instability. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is crucial. When looking at safety and soundness, more capital is better.

MCPHERSON COMMUNITY received a score of 2 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.

MCPHERSON COMMUNITY had a capitalization ratio of 2.00 percent in our test, lower than the average for all credit unions, an indication that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to absorb losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, MCPHERSON COMMUNITY scored 40 out of a possible 40 points, above the national average of 38.09 points.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

MCPHERSON COMMUNITY scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

One sign that MCPHERSON COMMUNITY is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, higher than 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.