Safe and Sound

SHENANGO CHINA AREA FEDERAL CREDIT

NEW CASTLE, PA
4
Star Rating
NEW CASTLE, PA-based SHENANGO CHINA AREA FEDERAL CREDIT is an NCUA-insured credit union started in 1935. The credit union holds $13.8 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 4 full-time employees, the credit union has amassed loans and leases worth $7.0 million. Its 2,178 members currently have $11.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SHENANGO CHINA AREA FEDERAL CREDIT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to grade 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 key. It works as a bulwark against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, more capital is preferred.

SHENANGO CHINA AREA FEDERAL CREDIT racked up 28 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.

SHENANGO CHINA AREA FEDERAL CREDIT appears to be on more solid financial footing than its peers, with a capitalization ratio of 28.00 percent in our test, above the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.

Having large numbers of these kinds of assets means a credit union could have to use capital to absorb losses, cutting down on its equity buffer. 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, reducing earnings and increasing the risk of a failure in the future.

SHENANGO CHINA AREA FEDERAL CREDIT fell short of the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

SHENANGO CHINA AREA FEDERAL CREDIT received below-average marks on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

The credit union 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.