WHAT IS
SAFE AND SOUND?
Capital acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is a key measurement of its financial strength. From a safety and soundness perspective, the higher the capital, the better.
MON VALLEY COMMUNITY beat out the national average of 15.65 points on our test to measure capital adequacy, racking up 30 out of a possible 30 points.
MON VALLEY COMMUNITY appears to be on more solid financial footing than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.
This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.
A credit union with a large number of these types of assets could eventually be forced to use capital to absorb losses, shrinking its equity cushion. 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 reduced earnings and potentially more risk of a failure in the future.
On Bankrate's test of asset quality, MON VALLEY COMMUNITY scored 36 out of a possible 40 points, lower than the national average of 38.09 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.
A credit union's profitability affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.
MON VALLEY COMMUNITY scored 10 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.
MON VALLEY COMMUNITY 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.
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.
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.