Safe and Sound

PERU MUNICIPAL

PERU, IL
4
Star Rating
PERU MUNICIPAL is a PERU, IL-based, NCUA-insured credit union founded in 1964. As of June 30, 2017, the credit union held assets of $467,490.

The credit union holds loans and leases worth $377,324. Its 170 members currently have $396,062 in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PERU MUNICIPAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing economic trouble. It follows then that an institution's level of capital is a key measurement of its financial strength. When it comes to safety and soundness, more capital is better.

PERU MUNICIPAL did better than the national average of 15.26 points on our test to measure capital adequacy, scoring 20 out of a possible 30 points.

PERU MUNICIPAL's capitalization ratio of 14.00 percent in our test was above the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

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

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, shrinking 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 depressed earnings and potentially more risk of a future failure.

PERU MUNICIPAL scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.15.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, are less able to do those things.

PERU MUNICIPAL scored 8 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.31.

PERU MUNICIPAL had an earnings ratio of 4.00 percent in our test, higher than the average for all credit unions, suggesting 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.