Safe and Sound

METHODIST HEALTHCARE

Memphis, TN
5
Star Rating
Memphis, TN-based METHODIST HEALTHCARE is an NCUA-insured credit union founded in 1960. As of December 31, 2017, the credit union held assets of $39.0 million.

Thanks to the efforts of 17 full-time employees, the credit union currently holds loans and leases worth $13.4 million. METHODIST HEALTHCARE's 7,540 members currently have $32.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, METHODIST HEALTHCARE exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to evaluate American credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during periods of financial trouble for the credit union. It follows then that an institution's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

METHODIST HEALTHCARE did better than the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 22 out of a possible 30 points.

METHODIST HEALTHCARE had a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions, suggesting that it's on more solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these types of assets may eventually have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and elevating the chances of a future failure.

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

The credit union's ratio of problem assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

METHODIST HEALTHCARE scored 10 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.