Safe and Sound

THE MUNICIPAL

Sioux City, IA
4
Star Rating
Founded in 1938, THE MUNICIPAL is an NCUA-insured credit union headquartered in Sioux City, IA. As of December 31, 2017, the credit union had assets of $17.8 million.

Thanks to the efforts of 4 full-time employees, the credit union holds loans and leases worth $8.8 million. Its 2,027 members currently have $16.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, THE MUNICIPAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

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

THE MUNICIPAL received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

THE MUNICIPAL's capitalization ratio of 8.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries 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.

A credit union with extensive holdings of these kinds of assets could eventually have to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a failure in the future.

THE MUNICIPAL did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

THE MUNICIPAL scored 12 out of a possible 30 on Bankrate's test of earnings, above the national average of 10.11.

THE MUNICIPAL had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's doing better than 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.