Safe and Sound

CENTRAL VALLEY

ARNOLD, PA
1
Star Rating
ARNOLD, PA-based CENTRAL VALLEY is an NCUA-insured credit union started in 1935. The credit union holds assets of $2.1 million, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $1.3 million. Its 485 members currently have $2.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CENTRAL VALLEY exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is valuable. It acts as a bulwark against losses and affords protection for members when a credit union is experiencing financial trouble. From a safety and soundness perspective, more capital is better.

CENTRAL VALLEY received a score of 4 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 15.65.

CENTRAL VALLEY had a capitalization ratio of 4.00 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

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

Having a large number of these types of assets suggests a credit union may have to use capital to absorb losses, diminishing 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 reduced earnings and potentially more risk of a future failure.

CENTRAL VALLEY scored below the national average of 38.09 on Bankrate's asset quality test, racking up 20 out of a possible 40 points .

Troubled assets made up 0.00 percent of CENTRAL VALLEY's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, CENTRAL VALLEY scored 0 out of a possible 30, falling short of the national average of 10.11.

One indication that CENTRAL VALLEY is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.