Safe and Sound

HERSHEY

Hummelstown, PA
4
Star Rating
Started in 1949, HERSHEY is an NCUA-insured credit union based in Hummelstown, PA. The credit union has assets of $63.8 million, according to December 31, 2017, regulatory filings.

With 19 full-time employees, the credit union currently holds loans and leases worth $43.5 million. Its 6,702 members currently have $58.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HERSHEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during times of financial instability for the credit union. Therefore, an institution's level of capital is an important measurement of its financial fortitude. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, HERSHEY received a score of 6 out of a possible 30 points, coming in below the national average of 15.65.

HERSHEY appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 6.00 percent in our test, below the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a failure in the future.

HERSHEY beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of HERSHEY's total assets in our test, below the national average and potentially indicative 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 can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, HERSHEY scored 10 out of a possible 30, lower than the national average of 10.11.

One indication 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.