Safe and Sound

FIRST PA TWP EMP

King of Prussia, PA
4
Star Rating
FIRST PA TWP EMP is an NCUA-insured credit union started in 1967 and currently based in King of Prussia, PA. The credit union holds $1.7 million in assets, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $1.2 million. FIRST PA TWP EMP's 284 members currently have $1.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST PA TWP EMP exhibited a good condition, earning 4 out of 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 American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is a valuable measurement of its financial resilience. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, FIRST PA TWP EMP received a score of 10 out of a possible 30 points, falling short of the national average of 15.65.

FIRST PA TWP EMP appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these types of assets suggests a credit union could have to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a future failure.

FIRST PA TWP EMP fell below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

FIRST PA TWP EMP's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

FIRST PA TWP EMP did below-average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One indication that FIRST PA TWP EMP 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.