Safe and Sound

MERHO

JOHNSTOWN, PA
4
Star Rating
MERHO is an NCUA-insured credit union founded in 1972 and currently based in JOHNSTOWN, PA. The credit union holds $45.8 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 8 full-time employees, the credit union holds loans and leases worth $17.0 million. Its 5,292 members currently have $40.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MERHO exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial resilience. It acts as a cushion against losses and as 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, MERHO received a score of 12 out of a possible 30 points, coming in below the national average of 15.65.

MERHO had a capitalization ratio of 12.00 percent in our test, below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

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

MERHO scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.09.

Troubled assets made up 0.00 percent of MERHO's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

MERHO received below-average marks on Bankrate's earnings test, achieving a score of 8 out of a possible 30.

One indication that the credit union is outperforming 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.