Safe and Sound

ROCKFORD MUNICIPAL EMPLOYES

Rockford, IL
4
Star Rating
ROCKFORD MUNICIPAL EMPLOYES is a Rockford, IL-based, NCUA-insured credit union that opened its doors in 1942. As of December 31, 2017, the credit union held assets of $19.6 million.

With 5 full-time employees, the credit union holds loans and leases worth $7.9 million. ROCKFORD MUNICIPAL EMPLOYES's 2,477 members currently have $17.3 million in shares with the credit union.

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

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is important. It acts as a bulwark against losses and provides protection for members during times of economic instability for the credit union. From a safety and soundness perspective, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, ROCKFORD MUNICIPAL EMPLOYES received a score of 14 out of a possible 30 points, falling short of the national average of 15.65.

ROCKFORD MUNICIPAL EMPLOYES had a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

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

ROCKFORD MUNICIPAL EMPLOYES scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.09.

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

Earnings score

A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

ROCKFORD MUNICIPAL EMPLOYES fell short of the national average on Bankrate's earnings test, achieving a score of 8 out of a possible 30.

One sign that ROCKFORD MUNICIPAL EMPLOYES is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above the average for all credit unions.

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.