Safe and Sound

PAPER CONVERTERS LOCAL 286/1034

Philadelphia, PA
2
Star Rating
PAPER CONVERTERS LOCAL 286/1034 is a Philadelphia, PA-based, NCUA-insured credit union founded in 1979. Regulatory filings show the credit union having $1.5 million in assets, as of December 31, 2017.

The credit union has amassed loans and leases worth $818,898. PAPER CONVERTERS LOCAL 286/1034's 1,869 members currently have $1.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PAPER CONVERTERS LOCAL 286/1034 exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is essential. When looking at safety and soundness, the higher the capital, the better.

PAPER CONVERTERS LOCAL 286/1034 fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 8 out of a possible 30 points.

PAPER CONVERTERS LOCAL 286/1034 had a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets may eventually be forced to use capital to absorb losses, diminishing its cushion of equity. 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 diminished earnings and potentially more risk of a future failure.

PAPER CONVERTERS LOCAL 286/1034 scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

A lower-than-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 long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address 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.

PAPER CONVERTERS LOCAL 286/1034 scored 0 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

PAPER CONVERTERS LOCAL 286/1034 had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of its peers in this area.

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.