Safe and Sound

MICHIGAN STATE UNIVERSITY

EAST LANSING, MI
5
Star Rating
East Lansing, MI-based MICHIGAN STATE UNIVERSITY is an NCUA-insured credit union founded in 1979. Regulatory filings show the credit union having assets of $3.85 billion, as of December 31, 2017.

With 758 full-time employees, the credit union currently holds loans and leases worth $3.00 billion. MICHIGAN STATE UNIVERSITY's 251,497 members currently have $3.18 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MICHIGAN STATE UNIVERSITY exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial fortitude, capital is useful. When looking at safety and soundness, the more capital, the better.

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

MICHIGAN STATE UNIVERSITY 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, lower than the average for all credit unions.

Asset Quality Score

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

Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to cover losses, diminishing its cushion of equity. 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, resulting in depressed earnings and potentially more risk of a future failure.

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

The credit union's ratio of troubled assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

MICHIGAN STATE UNIVERSITY scored 20 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication 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.