Safe and Sound

MERRIMACK VALLEY

LAWRENCE, MA
4
Star Rating
MERRIMACK VALLEY is a LAWRENCE, MA-based, NCUA-insured credit union dating back to 1955. The credit union has assets of $596.9 million, according to December 31, 2017, regulatory filings.

With 91 full-time employees, the credit union currently holds loans and leases worth $371.6 million. Its 48,151 members currently have $521.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MERRIMACK VALLEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial fortitude. It acts as a cushion against losses and provides protection for members during periods of financial instability for the credit union. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, MERRIMACK VALLEY received a score of 12 out of a possible 30 points, less than the national average of 15.65.

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

Asset Quality Score

This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.

Having lots of these types of assets means a credit union may 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 thus aren't earning interest for the credit union, pushing down earnings and elevating the risk of a failure in the future.

MERRIMACK VALLEY beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of MERRIMACK VALLEY's total assets in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, MERRIMACK VALLEY scored 16 out of a possible 30, beating the national average of 10.11.

MERRIMACK VALLEY had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign 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.