Safe and Sound

PREMIER COMMUNITY

STOCKTON, CA
4
Star Rating
STOCKTON, CA-based PREMIER COMMUNITY is an NCUA-insured credit union started in 1931. As of December 31, 2017, the credit union had assets of $145.2 million.

With 48 full-time employees, the credit union holds loans and leases worth $61.0 million. Its 11,111 members currently have $130.0 million in shares with the credit union.

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

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members during times of economic trouble for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is valuable. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, PREMIER COMMUNITY received a score of 10 out of a possible 30 points, falling short of the national average of 15.65.

PREMIER COMMUNITY's capitalization ratio of 10.00 percent in our test was below the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

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.

A credit union with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, cutting down on 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 lower earnings and potentially more risk of a failure in the future.

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

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address 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.

PREMIER COMMUNITY did below-average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

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.