Safe and Sound

MCU FINANCIAL CENTER

RACINE, WI
3
Star Rating
RACINE, WI-based MCU FINANCIAL CENTER is an NCUA-insured credit union started in 1939. Regulatory filings show the credit union having $23.5 million in assets, as of December 31, 2017.

Thanks to the efforts of 7 full-time employees, the credit union has amassed loans and leases worth $18.3 million. Its 3,609 members currently have $21.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MCU FINANCIAL CENTER exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a credit union's financial resilience. It acts as a cushion against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is better.

On our test to measure the adequacy of a credit union's capital, MCU FINANCIAL CENTER received a score of 10 out of a possible 30 points, less than the national average of 15.65.

MCU FINANCIAL CENTER had a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions, a sign that it's weaker than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due mortgages.

Having extensive holdings of these kinds of assets means a credit union could eventually have to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.

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

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

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money have less ability to do those things.

MCU FINANCIAL CENTER underperformed the average on Bankrate's earnings test, achieving a score of 4 out of a possible 30.

One sign that the credit union is beating 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.