Safe and Sound

MEMBERSALLIANCE

Rockford, IL
3
Star Rating
MEMBERSALLIANCE is an NCUA-insured credit union started in 1938 and currently based in Rockford, IL. Regulatory filings show the credit union having assets of $186.3 million, as of December 31, 2017.

Members have $120.9 million on deposit tended by 73 full-time employees. With that footprint, the credit union holds loans and leases worth $120.9 million. MEMBERSALLIANCE's 19,515 members currently have $168.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MEMBERSALLIANCE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions.

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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 economic trouble. It follows then that a credit union's level of capital is a crucial measurement of its financial resilience. When looking at safety and soundness, the higher the capital, the better.

MEMBERSALLIANCE received a score of 8 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 15.65.

MEMBERSALLIANCE's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

Having extensive holdings of these kinds of assets suggests a credit union may eventually have to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a future failure.

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

A below-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, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

MEMBERSALLIANCE fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One indication that MEMBERSALLIANCE is beating 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.