Safe and Sound

MEMPHIS MUNICIPAL EMPLOYEES

Memphis, TN
5
Star Rating
Memphis, TN-based MEMPHIS MUNICIPAL EMPLOYEES is an NCUA-insured credit union founded in 1963. Regulatory filings show the credit union having $13.6 million in assets, as of December 31, 2017.

Members have $4.9 million on deposit tended by 5 full-time employees. With that footprint, the credit union holds loans and leases worth $4.9 million. MEMPHIS MUNICIPAL EMPLOYEES's 2,600 members currently have $9.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MEMPHIS MUNICIPAL EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, MEMPHIS MUNICIPAL EMPLOYEES racked up 30 out of a possible 30 points, exceeding the national average of 15.65.

MEMPHIS MUNICIPAL EMPLOYEES appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 30.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets could eventually be required to use capital to cover losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

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

A lower-than-average ratio of problem assets of 0.00 percent in our test was 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, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial shocks. Conversely, losses lessen a credit union's ability to do those things.

MEMPHIS MUNICIPAL EMPLOYEES scored 6 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.11.

MEMPHIS MUNICIPAL EMPLOYEES had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.