Safe and Sound

PENN HILLS MUNICIPAL

Pittsburgh, PA
5
Star Rating
Pittsburgh, PA-based PENN HILLS MUNICIPAL is an NCUA-insured credit union founded in 1965. Regulatory filings show the credit union having $2.3 million in assets, as of December 31, 2017.

PENN HILLS MUNICIPAL's 216 members currently have $1.9 million in shares with the credit union. With that footprint, the credit union holds loans and leases worth $1.4 million.

Overall, Bankrate believes that, as of December 31, 2017, PENN HILLS MUNICIPAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

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

PENN HILLS MUNICIPAL racked up 24 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, better than the national average of 15.65.

PENN HILLS MUNICIPAL appears to be stronger than its peers, with a capitalization ratio of 24.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these kinds of assets suggests a credit union could have to use capital to absorb losses, shrinking its cushion 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, resulting in lower earnings and potentially more risk of a future failure.

PENN HILLS MUNICIPAL exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses reduce a credit union's ability to do those things.

On Bankrate's test of earnings, PENN HILLS MUNICIPAL scored 18 out of a possible 30, exceeding the national average of 10.11.

One indication that PENN HILLS MUNICIPAL is beating 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.