Safe and Sound

MSD

LOUISVILLE, KY
5
Star Rating
MSD is a LOUISVILLE, KY-based, NCUA-insured credit union started in 1971. The credit union has assets of $5.3 million, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union has amassed loans and leases worth $3.3 million. Its 835 members currently have $4.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MSD exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It works 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 the adequacy of a credit union's capital, MSD scored 30 out of a possible 30 points, beating out the national average of 15.65.

MSD's capitalization ratio of 30.00 percent in our test was better than the average for all credit unions, suggesting that it's stronger than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these types of assets means a credit union could eventually have to use capital to cover losses, decreasing 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 future failure.

MSD exceeded 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 troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

MSD fell behind the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One sign that the credit union is doing better than 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.