WHAT IS
SAFE AND SOUND?
Capital works as a buffer against losses and provides protection for members when a credit union is experiencing financial trouble. It follows then that when it comes to measuring an an institution's financial fortitude, capital is key. From a safety and soundness perspective, more capital is preferred.
PINEY HILLS FEDERAL did better than the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 24 out of a possible 30 points.
PINEY HILLS FEDERAL had a capitalization ratio of 24.00 percent in our test, better than the average for all credit unions, suggesting that it could have an easier time weathering financial trouble than its peers.
This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.
Having large numbers of these kinds of assets suggests a credit union may eventually have to use capital to cover losses, decreasing its equity cushion. 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, reducing earnings and increasing the risk of a future failure.
On Bankrate's asset quality test, PINEY HILLS FEDERAL scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
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 deal with problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.
On Bankrate's test of earnings, PINEY HILLS FEDERAL scored 0 out of a possible 30, failing to reach the national average of 10.11.
PINEY HILLS FEDERAL had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's beating its peers in this area.
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.
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.