Safe and Sound

FINANCIAL ADVANTAGE

Homestead, PA
4
Star Rating
FINANCIAL ADVANTAGE is an NCUA-insured credit union started in 1941 and currently based in Homestead, PA. Regulatory filings show the credit union having $9.2 million in assets, as of December 31, 2017.

With 2 full-time employees, the credit union currently holds loans and leases worth $2.4 million. FINANCIAL ADVANTAGE's 1,933 members currently have $8.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FINANCIAL ADVANTAGE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is experiencing financial instability. It follows then that an institution's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, more capital is better.

FINANCIAL ADVANTAGE achieved a score of 16 out of a possible 30 points on our test to measure capital adequacy, above the national average of 15.65.

FINANCIAL ADVANTAGE's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

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

Having a large number of these types of assets suggests a credit union could have to use capital to cover losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

FINANCIAL ADVANTAGE scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.09.

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

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

FINANCIAL ADVANTAGE scored 4 out of a possible 30 on Bankrate's earnings test, less than the national average of 10.11.

FINANCIAL ADVANTAGE had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting 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.