Understanding Credit Union Health Scores

PlainCU assigns a health score from 0 to 100 to every federally-insured credit union. This score is calculated from the same financial data that credit union regulators use, the NCUA 5300 Call Report, filed quarterly by all credit unions.

Score Bands

The Five Metrics

1. Net Worth Ratio (30% weight)

The net worth ratio, also called the capital adequacy ratio, is a credit union's net worth divided by total assets. NCUA regulations require credit unions to maintain a minimum net worth ratio of 7% to be "well capitalized." Higher is better.

• ≥ 10%: Exceptionally capitalized (full points)
• 7–10%: Well capitalized
• 6–7%: Adequately capitalized
• < 6%: Undercapitalized (regulatory concern)

2. Delinquency Rate (25% weight)

The delinquency rate measures loans 60+ days overdue as a percentage of total loans. High delinquency rates signal credit quality problems and future losses. Lower is better.

• < 0.5%: Excellent loan quality
• 0.5–1.0%: Good
• 1.0–2.0%: Fair
• > 2.0%: Elevated risk

3. Return on Assets (15% weight)

ROA measures how efficiently a credit union generates income from its assets. Positive ROA means the CU is profitable; negative ROA means it's losing money. Higher is better.

• ≥ 0.5%: Healthy profitability
• 0.1–0.5%: Adequate
• 0–0.1%: Marginal
• < 0%: Operating at a loss

4. Member Growth (15% weight)

Year-over-year membership growth reflects whether a credit union is attracting and retaining members. Sustained growth suggests a healthy, competitive institution.

5. Loan-to-Share Ratio (15% weight)

The loan-to-share ratio compares total loans to total deposits (shares). A ratio between 70–90% is generally considered healthy, the credit union is actively lending while maintaining adequate liquidity. Very low (<50%) may indicate excessive conservatism; very high (>100%) may indicate liquidity risk.

Data Source

All metrics are sourced from the NCUA 5300 Call Report, filed quarterly by every federally-insured credit union. PlainCU uses Q4 data from the most recent year available. This is the same data NCUA examiners use when evaluating credit union safety and soundness.

Limitations

The health score is a quantitative screening tool, not a regulatory assessment. It does not account for:

• Management quality or examiner findings
• Liquidity position beyond the loan-to-share ratio
• Interest rate risk in the investment portfolio
• Off-balance-sheet risks

A high score indicates strong publicly-reported financials, not a guarantee of safety. Always verify a credit union's current NCUA status and read their most recent financial statement before making significant deposit decisions.

Each pillar caps at 100 once a credit union clears its "excellent" threshold (net worth ratio 10%+, delinquency under 0.5%, and so on), so a large number of well-run credit unions tie at the same top composite score, 100 does not mean identical financial strength, only that every pillar cleared its excellent bar. Where scores tie, our rankings order by net worth ratio, the highest-weighted pillar, as the tie-break.