Safe and Sound

MUSKEGON

MUSKEGON, MI
4
Star Rating
MUSKEGON, MI-based MUSKEGON is an NCUA-insured credit union founded in 1951. The credit union has $49.8 million in assets, according to December 31, 2017, regulatory filings.

With 9 full-time employees, the credit union has amassed loans and leases worth $19.4 million. Its 5,350 members currently have $43.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MUSKEGON exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members during periods of financial trouble for the credit union. Therefore, an institution's level of capital is a key measurement of its financial strength. When looking at safety and soundness, the higher the capital, the better.

MUSKEGON finished below the national average of 15.65 on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

MUSKEGON had a capitalization ratio of 14.00 percent in our test, below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these kinds of assets could eventually have to use capital to cover losses, reducing 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 lower earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of MUSKEGON's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the credit union better able to withstand economic shocks. Losses, on the other hand, take away from a credit union's ability to do those things.

MUSKEGON scored 8 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 10.11.

MUSKEGON had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication 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.