Safe and Sound

MILLS42

LOWELL, MA
4
Star Rating
LOWELL, MA-based MILLS42 is an NCUA-insured credit union founded in 1958. Regulatory filings show the credit union having assets of $21.0 million, as of December 31, 2017.

Thanks to the efforts of 4 full-time employees, the credit union holds loans and leases worth $16.8 million. Its 2,631 members currently have $15.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MILLS42 exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members during times of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial stability, capital is key. When it comes to safety and soundness, more capital is preferred.

MILLS42 came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 10 out of a possible 30 points.

MILLS42 appears to be weaker than its peers in this area, with a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

Having extensive holdings of these types of assets means a credit union may eventually have to use capital to absorb losses, shrinking 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 interest for the credit union, pushing down earnings and elevating the chances of a failure in the future.

MILLS42 scored above the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

MILLS42 fell behind the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

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.

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.