Safe and Sound

PASADENA

Pasadena, CA
3
Star Rating
Pasadena, CA-based PASADENA is an NCUA-insured credit union started in 1935. The credit union holds assets of $162.9 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 33 full-time employees, the credit union has amassed loans and leases worth $62.6 million. PASADENA's 10,881 members currently have $145.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PASADENA exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to evaluate American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an an institution's financial fortitude, capital is useful. When it comes to safety and soundness, more capital is better.

PASADENA received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

PASADENA appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and elevating the risk of a failure in the future.

PASADENA scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, less than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings can be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand financial trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, PASADENA scored 2 out of a possible 30, less than the national average of 10.11.

The credit union 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.