Safe and Sound

FIRST AREA

LEWISTOWN, PA
3
Star Rating
LEWISTOWN, PA-based FIRST AREA is an NCUA-insured credit union started in 1961. The credit union holds assets of $18.2 million, according to December 31, 2017, regulatory filings.

With 6 full-time employees, the credit union holds loans and leases worth $6.3 million. Its 3,262 members currently have $16.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST AREA exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is useful. It works as a buffer against losses and provides protection for members during times of economic trouble for the credit union. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, FIRST AREA received a score of 8 out of a possible 30 points, lower than the national average of 15.65.

FIRST AREA's capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, suggesting that it's weaker 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 troubled assets, such as past-due mortgages.

Having large numbers of these types of assets may eventually require a credit union to use capital to cover losses, diminishing 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, resulting in lower earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath 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. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, FIRST AREA scored 4 out of a possible 30, lower than the national average of 10.11.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, better 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.