Safe and Sound

SCHOOLS

COMPTON, CA
5
Star Rating
SCHOOLS is a COMPTON, CA-based, NCUA-insured credit union started in 1939. Regulatory filings show the credit union having assets of $123.1 million, as of December 31, 2017.

With 33 full-time employees, the credit union holds loans and leases worth $71.2 million. SCHOOLS's 14,368 members currently have $106.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SCHOOLS exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members when a credit union is experiencing economic instability. Therefore, an institution's level of capital is a valuable measurement of its financial strength. From a safety and soundness perspective, the more capital, the better.

SCHOOLS exceeded the national average of 15.65 points on our test to measure capital adequacy, scoring 18 out of a possible 30 points.

SCHOOLS's capitalization ratio of 18.00 percent in our test was above the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

Having a large number of these types of assets may eventually require a credit union to use capital to cover losses, diminishing its buffer 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 future failure.

On Bankrate's test of asset quality, SCHOOLS scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

Troubled assets made up 0.00 percent of SCHOOLS's total assets in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance 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, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

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

One sign that SCHOOLS is doing better than 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.