Safe and Sound

NEW KENSINGTON MUNICIPAL

New Kensington, PA
5
Star Rating
Started in 1962, NEW KENSINGTON MUNICIPAL is an NCUA-insured credit union headquartered in New Kensington, PA. As of December 31, 2017, the credit union had assets of $2.1 million.

The credit union has amassed loans and leases worth $1.5 million. Its 216 members currently have $1.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NEW KENSINGTON MUNICIPAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is important. It works as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is better.

NEW KENSINGTON MUNICIPAL scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 30 out of a possible 30 points.

NEW KENSINGTON MUNICIPAL had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, suggesting that it could have an easier time weathering financial trouble than 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 large numbers of these kinds of assets could eventually force a credit union to use capital to absorb losses, diminishing its equity cushion. 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 future failure.

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

Earnings score

A credit union's profitability affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, NEW KENSINGTON MUNICIPAL scored 4 out of a possible 30, less than the national average of 10.11.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.