Safe and Sound

MONTGOMERY VA

MONTGOMERY, AL
4
Star Rating
MONTGOMERY VA is an NCUA-insured credit union founded in 1946 and currently based in MONTGOMERY, AL. As of December 31, 2017, the credit union held assets of $6.5 million.

With 4 full-time employees, the credit union has amassed loans and leases worth $2.5 million. MONTGOMERY VA's 1,207 members currently have $5.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MONTGOMERY VA 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 key criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is useful. It works as a cushion against losses and affords protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, MONTGOMERY VA scored 28 out of a possible 30 points, exceeding the national average of 15.65.

MONTGOMERY VA's capitalization ratio of 28.00 percent in our test was higher than the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

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

A credit union with a large number of these kinds of assets may eventually be forced to use capital to absorb losses, reducing 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 reduced earnings and potentially more risk of a failure in the future.

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

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

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money are less able to do those things.

MONTGOMERY VA fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.