Safe and Sound

MEMBERS CHOICE

ASHLAND, KY
4
Star Rating
ASHLAND, KY-based MEMBERS CHOICE is an NCUA-insured credit union started in 1932. As of December 31, 2017, the credit union had assets of $205.3 million.

With 41 full-time employees, the credit union holds loans and leases worth $129.4 million. MEMBERS CHOICE's 17,767 members currently have $180.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MEMBERS CHOICE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a credit union's financial strength. It acts as a bulwark against losses and as protection for members during periods of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, MEMBERS CHOICE received a score of 14 out of a possible 30 points, below the national average of 15.65.

MEMBERS CHOICE's capitalization ratio of 14.00 percent in our test was worse than the average for all credit unions, suggesting that it could be less resilient in a crisis 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 troubled assets, such as past-due mortgages.

A credit union with a large number of these types of assets could eventually have to use capital to absorb losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

MEMBERS CHOICE scored 36 out of a possible 40 points on Bankrate's test of asset quality, coming in below the national average of 38.09.

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

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

MEMBERS CHOICE scored 6 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's outperforming 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.