Safe and Sound

SIGNAL FINANCIAL

KENSINGTON, MD
3
Star Rating
SIGNAL FINANCIAL is an NCUA-insured credit union started in 1947 and currently headquartered in KENSINGTON, MD. The credit union holds $369.8 million in assets, according to June 30, 2017, regulatory filings.

Members have $269.9 million on deposit tended by 89 full-time employees. With that footprint, the credit union holds loans and leases worth $269.9 million. SIGNAL FINANCIAL's 22,566 members currently have $301.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SIGNAL FINANCIAL exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial strength. It acts as a bulwark against losses and affords protection for members during periods of economic trouble for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, SIGNAL FINANCIAL received a score of 10 out of a possible 30 points, less than the national average of 15.26.

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

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due loans.

Having lots of these types of assets may eventually require a credit union to use capital to cover losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a future failure.

SIGNAL FINANCIAL scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.15.

An above-average ratio of problem assets of 8.00 percent in our test was a potential cause for concern for SIGNAL FINANCIAL.

Earnings score

A credit union's earnings performance affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to address 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.

SIGNAL FINANCIAL scored 0 out of a possible 30 on Bankrate's earnings test, below the national average of 10.31.

One indication that SIGNAL FINANCIAL is lagging behind its peers in this area was its earnings ratio of -2.00 percent in our test, less 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.