Safe and Sound

WEBSTER CITY MUNICIPAL

Webster City, IA
5
Star Rating
Webster City, IA-based WEBSTER CITY MUNICIPAL is an NCUA-insured credit union founded in 1941. Regulatory filings show the credit union having $475,062 in assets, as of June 30, 2017.

The credit union currently holds loans and leases worth $132,859. Its 250 members currently have $316,851 in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, WEBSTER CITY MUNICIPAL exhibited a superior condition, earning a full 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 American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It works as a bulwark against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

WEBSTER CITY MUNICIPAL scored above the national average of 15.26 points on our test to measure the adequacy of a credit union's capital, racking up 30 out of a possible 30 points.

WEBSTER CITY MUNICIPAL had a capitalization ratio of 33.00 percent in our test, above the average for all credit unions, suggesting that it could be more resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these kinds of assets means a credit union could have to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a failure in the future.

WEBSTER CITY MUNICIPAL scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.15.

A higher-than-average ratio of problem assets of 8.00 percent in our test was a potential area of concern for the credit union.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, WEBSTER CITY MUNICIPAL scored 4 out of a possible 30, less than the national average of 10.31.

WEBSTER CITY MUNICIPAL had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's running neck and neck 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.