Safe and Sound

NEIGHBORS 1ST

WAYNESBORO, PA
2
Star Rating
WAYNESBORO, PA-based NEIGHBORS 1ST is an NCUA-insured credit union founded in 1968. As of December 31, 2017, the credit union held assets of $10.6 million.

With 3 full-time employees, the credit union has amassed loans and leases worth $3.2 million. Its 1,606 members currently have $10.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NEIGHBORS 1ST exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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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, a credit union's level of capital is a useful measurement of its financial strength. When looking at safety and soundness, the more capital, the better.

NEIGHBORS 1ST finished below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 2 out of a possible 30 points.

NEIGHBORS 1ST had a capitalization ratio of 2.00 percent in our test, worse than the average for all credit unions, an indication that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these types of assets could eventually force a credit union to use capital to cover losses, reducing 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 interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

NEIGHBORS 1ST scored 36 out of a possible 40 points on Bankrate's test of asset quality, below 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

A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. However, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, NEIGHBORS 1ST scored 0 out of a possible 30, lower than the national average of 10.11.

One indication that the credit union is outperforming 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.