WHAT IS
SAFE AND SOUND?
Capital is an important measurement of an institution's financial strength. It acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.
On our test to measure capital adequacy, MORRISON EMPLOYEES racked up 30 out of a possible 30 points, better than the national average of 15.65.
MORRISON EMPLOYEES appears to be stronger 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 unpaid mortgages.
Having extensive holdings of these types of assets may eventually require a credit union to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a failure in the future.
MORRISON EMPLOYEES scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.
The credit union's ratio of troubled assets was 0.00 percent in our test, lower than the national average and suggestive of greater financial strength than other credit unions.
How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the credit union better able to withstand financial shocks. Conversely, losses take away from a credit union's ability to do those things.
On Bankrate's earnings test, MORRISON EMPLOYEES scored 2 out of a possible 30, lower than the national average of 10.11.
MORRISON EMPLOYEES 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.
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.