Safe and Sound

NORTH CENTRAL AREA

HOUGHTON LAKE, MI
4
Star Rating
NORTH CENTRAL AREA is a HOUGHTON LAKE, MI-based, NCUA-insured credit union dating back to 1956. Regulatory filings show the credit union having assets of $113.3 million, as of December 31, 2017.

Thanks to the efforts of 29 full-time employees, the credit union has amassed loans and leases worth $50.8 million. NORTH CENTRAL AREA's 14,953 members currently have $102.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTH CENTRAL AREA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is essential. It acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

NORTH CENTRAL AREA received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, lower than the national average of 15.65.

NORTH CENTRAL AREA had a capitalization ratio of 8.00 percent in our test, lower than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

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

NORTH CENTRAL AREA scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

The credit union's ratio of problem 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 may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better able to withstand economic trouble. However, credit unions that are losing money are less able to do those things.

NORTH CENTRAL AREA fell short of the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

NORTH CENTRAL AREA had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's outperforming 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.