Fitch Ratings has affirmed Mid-Atlantic Corporate Federal Credit Union's (Mid-Atlantic) Long-term Issuer Default Rating (IDR) and Short-term IDR ratings at 'A+'/'F1+', respectively. In addition, Fitch has affirmed Mid-Atlantic's Viability Rating (VR) at 'bb-'. Mid-Atlantic's Rating Outlook remains Stable. A full list of rating actions follows at the end of this release.

KEY RATING DRIVERS

IDRs

The affirmation of Mid-Atlantic's IDRs and the Stable Outlook reflect Fitch's view that the company will continue to benefit from the government support provided to Corporate Credit Unions (CCUs) through the National Credit Union Association (NCUA). Fitch attributes an extremely high probability of support to CCUs from regulatory authorities, as reflected in its high support rating and support rating floor at '1' and 'A+', respectively. This view is underpinned by the NCUA's past actions and the U.S. Treasury's additional assistance to credit unions by extending the operation of the Temporary Corporate Credit Union Stabilization Fund through 2021.

The affirmation of Mid-Atlantic's 'F1+' Short-term IDR denotes the company's exceptionally high capacity for timely payment of short-term financial commitments, given government support will be provided if needed. Under Fitch's rating criteria, when a company's long-term IDR maps to more than one short-term rating, the higher short-term rating may be assigned. In this case, Mid-Atlantic's short-term IDR is 'F1+', reflecting government support. Mid-Atlantic's IDR is currently at its Support Rating floor.

VRs

Mid-Atlantic's VR affirmation primarily reflects the company's sufficient levels of capital and liquidity, adequate sources of contingent funding, and conservatively managed investment portfolio. Mid-Atlantic's leverage levels continued to improve since last review, exceeding 'well capitalized' standards set by the NCUA.

The company's VR is constrained by certain risk concentrations and operational limitations inherent with the CCU industry, along with the inability to generate meaningful amounts of organic capital. CCUs generally operate with higher levels of leverage than higher rated financial institutions. They are also highly interconnected with credit unions and rely on short term funding and excess liquidity within the industry, which can be volatile. Mid-Atlantic is highly dependent on the value of its investment securities portfolio for earnings and liquidity, which can fluctuate with movements in interest rates.

SUPPORT RATING AND SUPPORT RATING FLOOR

Mid-Atlantic's Support Rating of '1' reflects Fitch's view that the likelihood the company would receive extraordinary support is extremely likely should such support be needed. Mid-Atlantic's Support Rating Floor of 'A+' reflects Fitch's view that there is an extremely high probability of support to CCUs and Mid-Atlantic from regulatory authorities.

RATING SENSITIVITIES

IDRS

As previously noted, Mid-Atlantic's IDR is currently at its Support Rating Floor. As such, Mid-Atlantic's IDR is sensitive to Fitch's view of the expected level of support the CCU would receive during a period of distress. Fitch's view toward support for the CCUs was substantiated by the NCUA's past actions to entire CCU system and the US Treasury's continued support. However, as the CCU system continues to recover and systemic issues are addressed, Fitch will re-evaluate its view toward support. Should Fitch's view of the probability of support lessen without fundamental improvements in the financial profile of Mid-Atlantic, the current IDR would likely be downgraded.

VRs

Mid-Atlantic's VR is constrained by risks inherent with the CCU industry. As a service and liquidity provider to credit unions, Mid-Atlantic's VR is vulnerable to risks in the credit union industry and any deterioration in liquidity of member institutions. Additionally, a material devaluation of Mid-Atlantic's securities, inclusive of current issues surrounding student loan ABS, could affect capital levels and liquidity, which would prompt Fitch to review ratings.

Positive rating actions are currently constrained by the integration of the proposed merger with First Carolina Corporate Credit Union and to the extent that it could lead to lower than expected capital levels, deterioration in the funding profile, or an increased risk appetite.

SUPPORT RATING AND SUPPORT RATING FLOOR

Mid-Atlantic's Support Rating of '1' reflects Fitch's view that the likelihood the company would receive extraordinary support is extremely likely should such support be needed. Mid-Atlantic's Support Rating Floor of 'A+' reflects Fitch's view that there is an extremely high probability of support to CCUs and Mid-Atlantic from regulatory authorities.

Fitch has affirmed the following ratings with a Stable Rating Outlook:

Mid-Atlantic Corporate Federal Credit Union

--Long-term IDR at 'A+'; Outlook Stable;

--Short-term IDR at 'F1+';

--Viability Rating at 'bb-';

--Support Rating at '1';

--Support Rating Floor at 'A+';

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Global Bank Rating Criteria (pub. 20 Mar 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=863501

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998692

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998692

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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