Safe and Sound

ROCKET CITY

HUNTSVILLE, AL
4
Star Rating
ROCKET CITY is a HUNTSVILLE, AL-based, NCUA-insured credit union that opened its doors in 1954. The credit union has assets of $48.3 million, according to December 31, 2017, regulatory filings.

Members have $21.9 million on deposit tended by 11 full-time employees. With that footprint, the credit union currently holds loans and leases worth $21.9 million. Its 4,861 members currently have $40.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ROCKET CITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members during periods of economic instability for the credit union. Therefore, when it comes to measuring an a credit union's financial stability, capital is crucial. From a safety and soundness perspective, more capital is preferred.

ROCKET CITY achieved a score of 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

ROCKET CITY's capitalization ratio of 20.00 percent in our test was higher than the average for all credit unions, an indication that it's on more solid financial footing than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid loans.

Having extensive holdings of these kinds of assets suggests a credit union could eventually have to use capital to absorb 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, reducing earnings and increasing the risk of a future failure.

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

The credit union's ratio of problem assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.

ROCKET CITY scored 6 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.