Safe and Sound

S M

Philadelphia, PA
5
Star Rating
Founded in 1959, S M is an NCUA-insured credit union headquartered in Philadelphia, PA. As of June 30, 2017, the credit union had assets of $75,941.

Its 80 members currently have $59,148 in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $4,108.

Overall, Bankrate believes that, as of June 30, 2017, S M exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is useful. It acts as a bulwark against losses and affords protection for members during periods of economic trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

S M came in below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, racking up 14 out of a possible 30 points.

S M's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these types of assets suggests a credit union could eventually have to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a future failure.

S M scored 24 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.15.

S M's ratio of problem assets was 32.00 percent in our test, higher than the national average and a potential cause for concern.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic shocks. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's test of earnings, S M scored 2 out of a possible 30, less than the national average of 10.31.

S M had an earnings ratio of 0.00 percent in our test, lower than the average for all credit unions, suggesting that it's underperforming its peers in this area.

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.