Safe and Sound

DERTOWN SCHOOL

LATROBE, PA
5
Star Rating
LATROBE, PA-based DERTOWN SCHOOL is an NCUA-insured credit union started in 1955. The credit union holds $8.8 million in assets, according to December 31, 2017, regulatory filings.

The credit union holds loans and leases worth $6.2 million. DERTOWN SCHOOL's 716 members currently have $5.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DERTOWN SCHOOL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial resilience. It acts as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

DERTOWN SCHOOL beat out the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 30 out of a possible 30 points.

DERTOWN SCHOOL had a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions, a sign that it's on more solid financial footing than its peers.

Asset Quality Score

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

Having large numbers of these kinds of assets suggests a credit union could have to use capital to cover losses, shrinking its buffer of equity. 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, DERTOWN SCHOOL scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

DERTOWN SCHOOL's ratio of troubled assets was 0.00 percent 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 earning money has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

DERTOWN SCHOOL received below-average marks on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One indication that DERTOWN SCHOOL is outperforming 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.