WHAT IS
SAFE AND SOUND?
Capital is a valuable measurement of an institution's financial strength. It works as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. From a safety and soundness perspective, more capital is preferred.
MERCK EMPLOYEES received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.65.
MERCK EMPLOYEES had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, an indication that it's on less solid financial footing than its peers.
In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.
A credit union with extensive holdings of these types of assets could eventually have to use capital to absorb losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.
MERCK EMPLOYEES scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.
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.
A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.
MERCK EMPLOYEES received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.
One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.
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.