Safe and Sound

PINNACLE

EDISON, NJ
2
Star Rating
PINNACLE is an EDISON, NJ-based, NCUA-insured credit union dating back to 1962. The credit union has $137.3 million in assets, according to June 30, 2017, regulatory filings.

Members have $107.6 million on deposit tended by 28 full-time employees. With that footprint, the credit union holds loans and leases worth $107.6 million. Its 14,965 members currently have $114.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, PINNACLE exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members during periods of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial stability, capital is key. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, PINNACLE received a score of 4 out of a possible 30 points, less than the national average of 15.26.

PINNACLE's capitalization ratio of 6.00 percent in our test was lower than the average for all credit unions, a sign that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

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

Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to cover losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

PINNACLE scored 24 out of a possible 40 points on Bankrate's test of asset quality, failing to reach the national average of 38.15.

PINNACLE's ratio of troubled assets was 34.00 percent in our test, higher than the national average and something to watch.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, PINNACLE scored 6 out of a possible 30, coming in below the national average of 10.31.

The credit union had an earnings ratio of 2.00 percent in our test, better than the average for all credit unions, a sign that it's running ahead of 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.