Safe and Sound

SOMERVILLE MUNICIPAL

SOMERVILLE, MA
4
Star Rating
SOMERVILLE MUNICIPAL is an NCUA-insured credit union started in 1941 and currently headquartered in SOMERVILLE, MA. As of December 31, 2017, the credit union held assets of $42.0 million.

Members have $21.5 million on deposit tended by 4 full-time employees. With that footprint, the credit union currently holds loans and leases worth $21.5 million. Its 2,436 members currently have $35.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOMERVILLE 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 score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is important. It works as a cushion against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is better.

SOMERVILLE MUNICIPAL scored 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating out the national average of 15.65.

SOMERVILLE MUNICIPAL appears to be more resilient than its peers, with a capitalization ratio of 20.00 percent in our test, above the average for all credit unions.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

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

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

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to 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, increasing its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in tough times. Conversely, losses diminish a credit union's ability to do those things.

SOMERVILLE MUNICIPAL underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

SOMERVILLE MUNICIPAL had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's outperforming 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.