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 struggling financially. When looking at safety and soundness, the higher the capital, the better.
On our test to measure the adequacy of a credit union's capital, METRO MEDICAL racked up 16 out of a possible 30 points, beating out the national average of 15.65.
METRO MEDICAL had a capitalization ratio of 16.00 percent in our test, equal to the average for all credit unions, suggesting that it's running neck and neck with its peers.
Bankrate uses this test to estimate the impact of problem 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 extensive holdings of these types of assets could eventually have to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.
METRO MEDICAL scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.
METRO MEDICAL's ratio of troubled assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.
How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.
METRO MEDICAL scored 10 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.11.
One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.