Safe and Sound

ALLEGHENY CENTRAL

Dunbar, PA
5
Star Rating
Founded in 1935, ALLEGHENY CENTRAL is an NCUA-insured credit union based in Dunbar, PA. The credit union has $6.2 million in assets, according to December 31, 2017, regulatory filings.

Members have $4.1 million on deposit tended by 2 full-time employees. With that footprint, the credit union currently holds loans and leases worth $4.1 million. ALLEGHENY CENTRAL's 860 members currently have $5.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ALLEGHENY CENTRAL 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 evaluate American credit unions on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during periods of economic trouble for the credit union. Therefore, an institution's level of capital is a key measurement of its financial strength. When it comes to safety and soundness, more capital is better.

ALLEGHENY CENTRAL received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

ALLEGHENY CENTRAL's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem 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 types of assets may eventually be required to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and elevating the risk of a failure in the future.

On Bankrate's asset quality test, ALLEGHENY CENTRAL scored 40 out of a possible 40 points, better than the national average of 38.09 points.

The credit union's ratio of problem assets was 0.00 percent in our test, beneath the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the credit union more resilient in tough times. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's test of earnings, ALLEGHENY CENTRAL scored 18 out of a possible 30, beating the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's beating 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.