Safe and Sound

MICHIGAN COASTAL

Muskegon, MI
4
Star Rating
Muskegon, MI-based MICHIGAN COASTAL is an NCUA-insured credit union founded in 1958. Regulatory filings show the credit union having assets of $15.4 million, as of December 31, 2017.

With 7 full-time employees, the credit union has amassed loans and leases worth $11.6 million. Its 3,100 members currently have $12.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MICHIGAN COASTAL 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 key 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 an essential measurement of a credit union's financial strength. It acts as a buffer against losses and as protection for members during times of economic trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, MICHIGAN COASTAL received a score of 12 out of a possible 30 points, failing to reach the national average of 15.65.

MICHIGAN COASTAL appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having extensive holdings of these types of assets could eventually force a credit union to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and elevating the chances of a future failure.

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

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

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand financial trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, MICHIGAN COASTAL scored 14 out of a possible 30, beating out the national average of 10.11.

One indication that MICHIGAN COASTAL is beating 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.