Safe and Sound

PENNSYLVANIA STATE EMPLOYEES

Harrisburg, PA
5
Star Rating
PENNSYLVANIA STATE EMPLOYEES is a Harrisburg, PA-based, NCUA-insured credit union dating back to 1933. The credit union holds $5.05 billion in assets, according to June 30, 2017, regulatory filings.

Members have $3.71 billion on deposit tended by 698 full-time employees. With that footprint, the credit union holds loans and leases worth $3.71 billion. PENNSYLVANIA STATE EMPLOYEES's 432,398 members currently have $4.48 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PENNSYLVANIA STATE EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is key. It works as a buffer against losses and provides protection for members when a credit union is experiencing economic trouble. When looking at safety and soundness, more capital is better.

PENNSYLVANIA STATE EMPLOYEES received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.26.

PENNSYLVANIA STATE EMPLOYEES had a capitalization ratio of 11.00 percent in our test, lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these types of assets may eventually be required to use capital to absorb losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

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

Troubled assets made up 4.00 percent of PENNSYLVANIA STATE EMPLOYEES's total assets in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings can 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 better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

PENNSYLVANIA STATE EMPLOYEES scored 18 out of a possible 30 on Bankrate's earnings test, beating out the national average of 10.31.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 9.00 percent in our test, better than 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.