Safe and Sound

PEABODY MUNICIPAL

PEABODY, MA
4
Star Rating
Started in 1961, PEABODY MUNICIPAL is an NCUA-insured credit union headquartered in PEABODY, MA. Regulatory filings show the credit union having $27.0 million in assets, as of December 31, 2017.

Members have $5.3 million on deposit tended by 5 full-time employees. With that footprint, the credit union holds loans and leases worth $5.3 million. PEABODY MUNICIPAL's 2,158 members currently have $23.9 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during times of economic trouble for the credit union. It follows then that a credit union's level of capital is an important measurement of its financial resilience. When looking at safety and soundness, more capital is preferred.

PEABODY MUNICIPAL fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 14 out of a possible 30 points.

PEABODY MUNICIPAL's capitalization ratio of 14.00 percent in our test was below the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with a large number of these kinds of assets may eventually be required to use capital to cover losses, cutting down on its cushion 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, diminishing earnings and elevating the risk of a failure in the future.

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

PEABODY MUNICIPAL's ratio of troubled assets was 0.00 percent in our test, below 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 long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand financial trouble. Credit unions that are losing money, however, have less ability to do those things.

PEABODY MUNICIPAL scored 2 out of a possible 30 on Bankrate's earnings test, less than the national average of 10.11.

PEABODY MUNICIPAL had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting 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.