Safe and Sound

BACK MOUNTAIN

SHAVERTOWN, PA
4
Star Rating
SHAVERTOWN, PA-based BACK MOUNTAIN is an NCUA-insured credit union started in 1973. Regulatory filings show the credit union having $11.8 million in assets, as of December 31, 2017.

The credit union holds loans and leases worth $2.6 million. BACK MOUNTAIN's 809 members currently have $10.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BACK MOUNTAIN exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an an institution's financial stability, capital is crucial. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, BACK MOUNTAIN achieved a score of 20 out of a possible 30 points, above the national average of 15.65.

BACK MOUNTAIN's capitalization ratio of 20.00 percent in our test was above the average for all credit unions, an indication that it's more well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having extensive holdings of these types of assets may eventually require a credit union to use capital to cover 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 money, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, BACK MOUNTAIN scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's test of earnings, BACK MOUNTAIN scored 4 out of a possible 30, coming in below the national average of 10.11.

BACK MOUNTAIN had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication 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.