Safe and Sound

THUNDER BAY AREA

ALPENA, MI
3
Star Rating
THUNDER BAY AREA is an ALPENA, MI-based, NCUA-insured credit union started in 1958. The credit union holds assets of $24.5 million, according to June 30, 2017, regulatory filings.

With 6 full-time employees, the credit union currently holds loans and leases worth $15.8 million. THUNDER BAY AREA's 2,915 members currently have $22.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, THUNDER BAY AREA exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is essential. It acts as a bulwark against losses and as protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, more capital is better.

THUNDER BAY AREA fell below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, racking up 10 out of a possible 30 points.

THUNDER BAY AREA had a capitalization ratio of 9.00 percent in our test, below the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled 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 large numbers of these types of assets could eventually have to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, THUNDER BAY AREA scored 36 out of a possible 40 points, lower than the national average of 38.15 points.

An above-average ratio of problem assets of 10.00 percent in our test was a potential cause for concern for THUNDER BAY AREA.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's earnings test, THUNDER BAY AREA scored 2 out of a possible 30, lower than the national average of 10.31.

THUNDER BAY AREA had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, an indication that it's right in line with 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.