Safe and Sound

MED5

Rapid City, SD
4
Star Rating
MED5 is a Rapid City, SD-based, NCUA-insured credit union that opened its doors in 1966. Regulatory filings show the credit union having $65.7 million in assets, as of December 31, 2017.

Thanks to the work of 19 full-time employees, the credit union currently holds loans and leases worth $58.0 million. MED5's 5,349 members currently have $53.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MED5 exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during periods of economic trouble for the credit union. It follows then that an institution's level of capital is a useful measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, MED5 received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

MED5 had a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

Having extensive holdings of these kinds of assets may eventually require a credit union to use capital to cover losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

MED5 beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

MED5's ratio of problem assets was 0.00 percent in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

MED5 received above-average marks on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

The credit union 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.