Safe and Sound

HEMPFIELD AREA

Greensburg, PA
4
Star Rating
Started in 1959, HEMPFIELD AREA is an NCUA-insured credit union headquartered in Greensburg, PA. The credit union holds $6.3 million in assets, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $1.4 million. Its 667 members currently have $5.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEMPFIELD AREA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is key. It acts as a cushion against losses and affords protection for members when a credit union is experiencing financial trouble. When it comes to safety and soundness, more capital is better.

HEMPFIELD AREA beat out the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 16 out of a possible 30 points.

HEMPFIELD AREA had a capitalization ratio of 16.00 percent in our test, equal to the average for all credit unions, a sign that it's running neck and neck with its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid loans.

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

HEMPFIELD AREA did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of problem 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 making money affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. However, credit unions that are losing money are less able to do those things.

HEMPFIELD AREA fell behind the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

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