Safe and Sound

SHERCHEM

Ashtabula, OH
4
Star Rating
Founded in 1970, SHERCHEM is an NCUA-insured credit union headquartered in Ashtabula, OH. Regulatory filings show the credit union having assets of $2.5 million, as of December 31, 2017.

The credit union holds loans and leases worth $1.6 million. SHERCHEM's 484 members currently have $2.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SHERCHEM 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 key criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an a credit union's financial resilience, capital is key. When it comes to safety and soundness, the more capital, the better.

SHERCHEM beat out the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 28 out of a possible 30 points.

SHERCHEM appears to be more resilient 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's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these types of assets may eventually force a credit union to use capital to cover losses, decreasing its cushion 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 depressed earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of SHERCHEM'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 ability to earn money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's earnings test, SHERCHEM scored 0 out of a possible 30, failing to reach the national average of 10.11.

SHERCHEM had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's beating 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.