Safe and Sound

SERVICE 1

MUSKEGON, MI
5
Star Rating
MUSKEGON, MI-based SERVICE 1 is an NCUA-insured credit union founded in 1940. As of December 31, 2017, the credit union had assets of $113.5 million.

Members have $76.2 million on deposit tended by 32 full-time employees. With that footprint, the credit union currently holds loans and leases worth $76.2 million. Its 18,542 members currently have $93.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SERVICE 1 exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is crucial. It acts as a cushion against losses and provides protection for members during times of financial instability for the credit union. When it comes to safety and soundness, the higher the capital, the better.

SERVICE 1 beat out the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, scoring 26 out of a possible 30 points.

SERVICE 1 had a capitalization ratio of 26.00 percent in our test, higher than the average for all credit unions, an indication that it's more well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having lots of these kinds of assets may eventually require a credit union to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

SERVICE 1 scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A below-average ratio of troubled assets of 0.00 percent in our test was 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 safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial shocks. Conversely, losses diminish a credit union's ability to do those things.

SERVICE 1 beat the national average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

One sign that SERVICE 1 is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher than 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.