Safe and Sound

WORCESTER

WORCESTER, MA
4
Star Rating
WORCESTER is a WORCESTER, MA-based, NCUA-insured credit union that opened its doors in 1976. As of December 31, 2017, the credit union had assets of $80.7 million.

With 21 full-time employees, the credit union has amassed loans and leases worth $55.2 million. Its 7,346 members currently have $70.0 million in shares with the credit union.

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

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is crucial. It works as a cushion against losses and as protection for members when a credit union is experiencing financial instability. From a safety and soundness perspective, the more capital, the better.

WORCESTER received a score of 10 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

WORCESTER had a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with large numbers of these types of assets may eventually have to use capital to absorb losses, decreasing its buffer 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, resulting in diminished earnings and potentially more risk of a future failure.

WORCESTER scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

A below-average ratio of troubled assets of 0.00 percent in our test was 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 long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, WORCESTER scored 8 out of a possible 30, less than the national average of 10.11.

One sign that WORCESTER is running ahead of 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.