Safe and Sound

SOUTH SHORE RAILROAD EMP

MICHIGAN CITY, IN
2
Star Rating
SOUTH SHORE RAILROAD EMP is a MICHIGAN CITY, IN-based, NCUA-insured credit union started in 1936. The credit union holds assets of $4.1 million, according to June 30, 2017, regulatory filings.

Thanks to the work of 2 full-time employees, the credit union holds loans and leases worth $2.4 million. SOUTH SHORE RAILROAD EMP's 1,025 members currently have $3.9 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SOUTH SHORE RAILROAD EMP exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial stability, capital is important. From a safety and soundness perspective, more capital is preferred.

SOUTH SHORE RAILROAD EMP fell below the national average of 15.26 on our test to measure capital adequacy, scoring 2 out of a possible 30 points.

SOUTH SHORE RAILROAD EMP appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 5.00 percent in our test, below the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets could eventually force a credit union to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

SOUTH SHORE RAILROAD EMP fell below the national average of 38.15 on Bankrate's asset quality test, racking up 8 out of a possible 40 points .

Troubled assets made up 64.00 percent of the credit union's total assets in our test, greater than the national average and something to keep an eye on.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

SOUTH SHORE RAILROAD EMP scored 0 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.31.

One indication that SOUTH SHORE RAILROAD EMP is performing behind its peers in this area was its earnings ratio of -47.00 percent in our test, below 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.