Safe and Sound

P S E

Somerset, NJ
5
Star Rating
Founded in 1958, P S E is an NCUA-insured credit union based in Somerset, NJ. The credit union holds $12.0 million in assets, according to December 31, 2017, regulatory filings.

The credit union holds loans and leases worth $5.2 million. Its 1,288 members currently have $10.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, P S E 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 score American 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 as protection for members when a credit union is experiencing economic instability. It follows then that when it comes to measuring an a credit union's financial stability, capital is important. When looking at safety and soundness, more capital is preferred.

P S E received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

P S E's capitalization ratio of 14.00 percent in our test was worse than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these types of assets could eventually have 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 thus aren't earning interest for the credit union, reducing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, P S E scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

A below-average ratio of problem 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 earnings performance affects its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

P S E exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

One sign that P S E is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.