Safe and Sound

SM

MISSION, KS
5
Star Rating
MISSION, KS-based SM is an NCUA-insured credit union started in 1960. The credit union holds $67.4 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 4 full-time employees, the credit union has amassed loans and leases worth $52.7 million. Its 2,508 members currently have $55.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SM exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to evaluate American 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 stability, capital is essential. It acts as a bulwark against losses and affords protection for members during times of financial trouble 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, SM racked up 24 out of a possible 30 points, beating the national average of 15.65.

SM had a capitalization ratio of 24.00 percent in our test, better than the average for all credit unions, a sign that it's stronger 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 lots of these types of assets could eventually be forced to use capital to absorb losses, cutting down on 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 depressed earnings and potentially more risk of a future failure.

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

SM's ratio of problem 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

How successful a credit union is at making money affects its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, SM scored 8 out of a possible 30, coming in below the national average of 10.11.

One indication that the credit union is doing better than 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.