Safe and Sound

LOCAL 520 U A

HARRISBURG, PA
5
Star Rating
HARRISBURG, PA-based LOCAL 520 U A is an NCUA-insured credit union founded in 1961. As of December 31, 2017, the credit union had assets of $8.0 million.

Its 1,635 members currently have $5.9 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $3.4 million.

Overall, Bankrate believes that, as of December 31, 2017, LOCAL 520 U A exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during periods of financial trouble for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is important. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, LOCAL 520 U A achieved a score of 30 out of a possible 30 points, exceeding the national average of 15.65.

LOCAL 520 U A's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

A credit union with lots of these kinds of assets could eventually have to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, LOCAL 520 U A scored 36 out of a possible 40 points, lower than the national average of 38.09 points.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the credit union better prepared to withstand financial shocks. Conversely, losses take away from a credit union's ability to do those things.

LOCAL 520 U A fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

LOCAL 520 U A had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's running ahead of 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.