Safe and Sound

WORCESTER FIRE DEPT.

WORCESTER, MA
4
Star Rating
WORCESTER, MA-based WORCESTER FIRE DEPT. is an NCUA-insured credit union started in 1937. The credit union has assets of $39.5 million, according to December 31, 2017, regulatory filings.

Members have $9.2 million on deposit tended by 4 full-time employees. With that footprint, the credit union has amassed loans and leases worth $9.2 million. WORCESTER FIRE DEPT.'s 1,940 members currently have $34.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, WORCESTER FIRE DEPT. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members during times of financial trouble for the credit union. It follows then that when it comes to measuring an an institution's financial resilience, capital is useful. From a safety and soundness perspective, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, WORCESTER FIRE DEPT. scored 18 out of a possible 30 points, exceeding the national average of 15.65.

WORCESTER FIRE DEPT. had a capitalization ratio of 18.00 percent in our test, better than the average for all credit unions, an indication that it's stronger than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with a large number of these kinds of assets could eventually be forced to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, WORCESTER FIRE DEPT. scored 40 out of a possible 40 points, better than the national average of 38.09 points.

WORCESTER FIRE DEPT.'s ratio of troubled assets was 0.00 percent in our test, beneath the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings may 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 tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's earnings test, WORCESTER FIRE DEPT. scored 2 out of a possible 30, below the national average of 10.11.

One indication that WORCESTER FIRE DEPT. is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.