Safe and Sound

PENTAGON

ALEXANDRIA, VA
4
Star Rating
PENTAGON is a TYSONS CORNER, VA-based, NCUA-insured credit union started in 1935. Regulatory filings show the credit union having $22.86 billion in assets, as of December 31, 2017.

With 2,064 full-time employees, the credit union currently holds loans and leases worth $19.51 billion. PENTAGON's 1,626,359 members currently have $17.81 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PENTAGON exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is crucial. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, PENTAGON received a score of 10 out of a possible 30 points, falling short of the national average of 15.65.

PENTAGON appears to be less well prepared for financial trouble 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

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

Having a large number of these types of assets means a credit union may have to use capital to absorb losses, diminishing 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, resulting in diminished earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of PENTAGON's total assets in our test, less than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand financial shocks. Conversely, losses reduce a credit union's ability to do those things.

On Bankrate's earnings test, PENTAGON scored 16 out of a possible 30, beating the national average of 10.11.

One sign that the credit union is beating 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.