Safe and Sound

MICHIGAN EDUCATIONAL

PLYMOUTH, MI
4
Star Rating
PLYMOUTH, MI-based MICHIGAN EDUCATIONAL is an NCUA-insured credit union founded in 1942. As of December 31, 2017, the credit union held assets of $799.6 million.

With 77 full-time employees, the credit union holds loans and leases worth $467.1 million. Its 50,782 members currently have $697.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MICHIGAN EDUCATIONAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during periods of financial trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is essential. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, MICHIGAN EDUCATIONAL racked up 16 out of a possible 30 points, beating the national average of 15.65.

MICHIGAN EDUCATIONAL had a capitalization ratio of 16.00 percent in our test, identical the average for all credit unions, suggesting that it's right in line with its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, 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 suggests a credit union could eventually have to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

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

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

MICHIGAN EDUCATIONAL did below-average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

One indication that the credit union 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.