Safe and Sound

SCHOOLS FINANCIAL

Sacramento, CA
5
Star Rating
SCHOOLS FINANCIAL is a Sacramento, CA-based, NCUA-insured credit union that opened its doors in 1933. The credit union holds $1.91 billion in assets, according to December 31, 2017, regulatory filings.

Members have $1.28 billion on deposit tended by 281 full-time employees. With that footprint, the credit union has amassed loans and leases worth $1.28 billion. Its 143,898 members currently have $1.65 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SCHOOLS FINANCIAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members during times of economic instability for the credit union. It follows then that an institution's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

SCHOOLS FINANCIAL came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 12 out of a possible 30 points.

SCHOOLS FINANCIAL had a capitalization ratio of 12.00 percent in our test, lower than the average for all credit unions, a sign that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these kinds of assets may eventually force a credit union to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a future failure.

SCHOOLS FINANCIAL exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than 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, expanding its capital cushion, or use them to address problematic loans, likely making the credit union better able to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

SCHOOLS FINANCIAL scored 20 out of a possible 30 on Bankrate's earnings test, beating the national average of 10.11.

SCHOOLS FINANCIAL had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's outperforming 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.