Safe and Sound

USEM MENA

MENA, AR
5
Star Rating
USEM MENA is an NCUA-insured credit union founded in 1967 and currently based in MENA, AR. As of December 31, 2017, the credit union had assets of $2.1 million.

Its 489 members currently have $1.7 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $1.0 million.

Overall, Bankrate believes that, as of December 31, 2017, USEM MENA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during periods of economic instability for the credit union. Therefore, when it comes to measuring an an institution's financial strength, capital is valuable. When looking at safety and soundness, more capital is better.

USEM MENA did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 30 out of a possible 30 points.

USEM MENA's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, a sign that it's more well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these kinds of assets could 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, resulting in depressed earnings and potentially more risk of a future failure.

USEM MENA beat out the national average of 38.09 on Bankrate's asset quality test, 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, beneath the national average and potentially indicative of greater financial strength than 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, expanding its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, USEM MENA scored 4 out of a possible 30, less than the national average of 10.11.

USEM MENA had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's beating 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.