Safe and Sound

OTIS

JAY, ME
5
Star Rating
OTIS is an NCUA-insured credit union started in 1954 and currently based in JAY, ME. The credit union has assets of $159.6 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 26 full-time employees, the credit union holds loans and leases worth $69.2 million. Its 10,842 members currently have $131.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, OTIS exhibited a superior condition, earning a full 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 grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is struggling financially. It follows then that a credit union's level of capital is an important measurement of its financial fortitude. From a safety and soundness perspective, more capital is better.

On our test to measure the adequacy of a credit union's capital, OTIS racked up 24 out of a possible 30 points, beating the national average of 15.65.

OTIS had a capitalization ratio of 24.00 percent in our test, higher than the average for all credit unions, a sign that it could be more resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these kinds of assets may eventually be forced to use capital to cover losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

OTIS did better than 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 OTIS's total assets in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

OTIS scored 10 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign 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.