Safe and Sound

GROVE CITY AREA

GROVE CITY, PA
4
Star Rating
GROVE CITY, PA-based GROVE CITY AREA is an NCUA-insured credit union started in 1950. The credit union holds $81.6 million in assets, according to December 31, 2017, regulatory filings.

With 20 full-time employees, the credit union currently holds loans and leases worth $46.4 million. GROVE CITY AREA's 8,690 members currently have $71.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, GROVE CITY AREA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to evaluate 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 strength, capital is important. It works as a bulwark against losses and provides protection for members during periods of financial trouble for the credit union. When it comes to safety and soundness, more capital is better.

GROVE CITY AREA achieved a score of 16 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.

GROVE CITY AREA'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

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets may eventually be required to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.

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

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand economic trouble. Conversely, losses take away from a credit union's ability to do those things.

GROVE CITY AREA scored 10 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign that it's doing better than 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.