Safe and Sound

BAYONNE SCHOOL EMPLOYEES

BAYONNE, NJ
3
Star Rating
BAYONNE SCHOOL EMPLOYEES is a BAYONNE, NJ-based, NCUA-insured credit union that opened its doors in 1938. Regulatory filings show the credit union having assets of $4.4 million, as of December 31, 2017.

BAYONNE SCHOOL EMPLOYEES's 640 members currently have $4.0 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $706,761.

Overall, Bankrate believes that, as of December 31, 2017, BAYONNE SCHOOL EMPLOYEES exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is valuable. It works as a cushion against losses and provides protection for members when a credit union is experiencing financial instability. From a safety and soundness perspective, the higher the capital, the better.

BAYONNE SCHOOL EMPLOYEES fell short of the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 6 out of a possible 30 points.

BAYONNE SCHOOL EMPLOYEES had a capitalization ratio of 6.00 percent in our test, worse than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

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

A credit union with a large number of these kinds of assets may eventually be forced to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and increasing the risk of a future failure.

BAYONNE SCHOOL EMPLOYEES scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

BAYONNE SCHOOL EMPLOYEES's ratio of problem assets was 0.00 percent in our test, lower than 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 affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, BAYONNE SCHOOL EMPLOYEES scored 8 out of a possible 30, below the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.