Safe and Sound

PEN AIR

PENSACOLA, FL
5
Star Rating
Founded in 1936, PEN AIR is an NCUA-insured credit union based in PENSACOLA, FL. The credit union holds $1.40 billion in assets, according to June 30, 2017, regulatory filings.

Members have $800.1 million on deposit tended by 324 full-time employees. With that footprint, the credit union holds loans and leases worth $800.1 million. Its 98,734 members currently have $1.21 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PEN AIR exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It works as a cushion against losses and affords protection for members during times of economic trouble for the credit union. From a safety and soundness perspective, the higher the capital, the better.

PEN AIR did better than the national average of 15.26 points on our test to measure the adequacy of a credit union's capital, achieving a score of 16 out of a possible 30 points.

PEN AIR appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having large numbers of these types of assets could eventually force a credit union to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, PEN AIR scored 40 out of a possible 40 points, better than the national average of 38.15 points.

PEN AIR's ratio of problem assets was 3.00 percent in our test, below the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, PEN AIR scored 18 out of a possible 30, exceeding the national average of 10.31.

The credit union had an earnings ratio of 8.00 percent in our test, above the average for all credit unions, suggesting that it's outperforming 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.