Safe and Sound

MEMBERS COMMUNITY

Muscatine, IA
4
Star Rating
Muscatine, IA-based MEMBERS COMMUNITY is an NCUA-insured credit union founded in 1957. The credit union has $57.5 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 19 full-time employees, the credit union holds loans and leases worth $41.8 million. Its 6,666 members currently have $49.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MEMBERS COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did 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 acts as a cushion against losses and provides protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an an institution's financial stability, capital is crucial. When looking at safety and soundness, more capital is better.

MEMBERS COMMUNITY finished below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 10 out of a possible 30 points.

MEMBERS COMMUNITY had a capitalization ratio of 10.00 percent in our test, less 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 is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these types of assets may eventually force a credit union to use capital to cover losses, shrinking 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 money, diminishing earnings and increasing the risk of a failure in the future.

MEMBERS COMMUNITY did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The credit union's ratio of troubled assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's test of earnings, MEMBERS COMMUNITY scored 16 out of a possible 30, exceeding 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, better 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.