Safe and Sound

PAGODA

Reading, PA
2
Star Rating
PAGODA is a Reading, PA-based, NCUA-insured credit union started in 1963. Regulatory filings show the credit union having assets of $23.6 million, as of December 31, 2017.

With 6 full-time employees, the credit union has amassed loans and leases worth $10.2 million. PAGODA's 3,798 members currently have $21.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PAGODA exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's 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

When it comes to measuring an institution's financial resilience, capital is useful. It acts as a cushion against losses and provides protection for members during times of financial trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

PAGODA scored below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 6 out of a possible 30 points.

PAGODA had a capitalization ratio of 6.00 percent in our test, lower than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets could eventually have to use capital to cover losses, diminishing 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 interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, PAGODA scored 40 out of a possible 40 points, beating 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 superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money are less able to do those things.

PAGODA scored 0 out of a possible 30 on Bankrate's earnings test, less than 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.