Safe and Sound

MIDWEST COMMUNITY

Defiance, OH
3
Star Rating
Founded in 1954, MIDWEST COMMUNITY is an NCUA-insured credit union headquartered in Defiance, OH. Regulatory filings show the credit union having $157.6 million in assets, as of December 31, 2017.

Thanks to the work of 44 full-time employees, the credit union has amassed loans and leases worth $91.4 million. MIDWEST COMMUNITY's 13,391 members currently have $143.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MIDWEST COMMUNITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial resilience. It works as a bulwark against losses and provides protection for members when a credit union is experiencing financial instability. When it comes to safety and soundness, more capital is better.

On our test to measure the adequacy of a credit union's capital, MIDWEST COMMUNITY received a score of 8 out of a possible 30 points, falling short of the national average of 15.65.

MIDWEST COMMUNITY had a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these types of assets could eventually be required to use capital to absorb losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, MIDWEST COMMUNITY scored 40 out of a possible 40 points, beating the national average of 38.09 points.

A lower-than-average ratio of troubled 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 profitability affects its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. Conversely, losses take away from a credit union's ability to do those things.

MIDWEST COMMUNITY scored 6 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.