Safe and Sound

SCHOOLS FINANCIAL

Sacramento, CA
5
Star Rating
SCHOOLS FINANCIAL is an NCUA-insured credit union founded in 1933 and currently based in Sacramento, CA. The credit union has $1.86 billion in assets, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 271 full-time employees, the credit union currently holds loans and leases worth $1.19 billion. Its 139,548 members currently have $1.62 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SCHOOLS FINANCIAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major 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 useful measurement of an institution's financial fortitude. It works as a buffer against losses and affords protection for members when a credit union is experiencing economic trouble. When looking at safety and soundness, more capital is better.

On our test to measure the adequacy of a credit union's capital, SCHOOLS FINANCIAL received a score of 12 out of a possible 30 points, failing to reach the national average of 15.26.

SCHOOLS FINANCIAL's capitalization ratio of 10.00 percent in our test was below the average for all credit unions, an indication that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these kinds of assets could eventually have 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 no longer earning money, diminishing earnings and elevating the chances of a future failure.

On Bankrate's asset quality test, SCHOOLS FINANCIAL scored 40 out of a possible 40 points, exceeding the national average of 38.15 points.

A lower-than-average ratio of troubled assets of 2.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, SCHOOLS FINANCIAL scored 20 out of a possible 30, above the national average of 10.31.

The credit union had an earnings ratio of 10.00 percent in our test, above the average for all credit unions, suggesting 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.