WHAT IS
SAFE AND SOUND?
Capital is a crucial measurement of a credit union's financial fortitude. It works as a bulwark against losses and provides protection for members when a credit union is experiencing economic trouble. 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, PYRAMID received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.
PYRAMID's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.
Bankrate uses this test to determine the effect of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.
Having extensive holdings of these types of assets could eventually require a credit union to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a failure in the future.
PYRAMID exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .
A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.
A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union better able to withstand economic shocks. Conversely, losses reduce a credit union's ability to do those things.
PYRAMID received below-average marks on Bankrate's earnings test, achieving a score of 4 out of a possible 30.
One indication that PYRAMID is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher than the average for all credit unions.
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.