Safe and Sound

SCHOOLSFIRST

SANTA ANA, CA
5
Star Rating
SANTA ANA, CA-based SCHOOLSFIRST is an NCUA-insured credit union founded in 1934. Regulatory filings show the credit union having $14.12 billion in assets, as of December 31, 2017.

Thanks to the efforts of 1,523 full-time employees, the credit union currently holds loans and leases worth $7.52 billion. SCHOOLSFIRST's 793,592 members currently have $12.07 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SCHOOLSFIRST exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is a valuable measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

SCHOOLSFIRST received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.65.

SCHOOLSFIRST appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 14.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having large numbers of these kinds of assets means a credit union may eventually have to use capital to absorb losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, lower than the national average and 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. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

SCHOOLSFIRST scored 16 out of a possible 30 on Bankrate's test of earnings, beating the national average of 10.11.

SCHOOLSFIRST had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's doing better than 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.