Safe and Sound

MONTOURSVILLE AREA

MONTOURSVILLE, PA
4
Star Rating
MONTOURSVILLE AREA is an NCUA-insured credit union started in 1967 and currently headquartered in MONTOURSVILLE, PA. As of December 31, 2017, the credit union had assets of $3.1 million.

Members have $2.1 million on deposit tended by 2 full-time employees. With that footprint, the credit union holds loans and leases worth $2.1 million. Its 834 members currently have $2.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MONTOURSVILLE AREA 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 important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing financial instability. It follows then that a credit union's level of capital is a valuable measurement of its financial resilience. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, MONTOURSVILLE AREA received a score of 14 out of a possible 30 points, coming in below the national average of 15.65.

MONTOURSVILLE AREA's capitalization ratio of 14.00 percent in our test was below the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

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

A credit union with extensive holdings of these types of assets could eventually be required to use capital to absorb losses, shrinking its buffer of equity. 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 risk of a future failure.

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

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

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, MONTOURSVILLE AREA scored 4 out of a possible 30, falling short of the national average of 10.11.

One indication that the credit union is running ahead of 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.