Safe and Sound

SIGNAL FINANCIAL

KENSINGTON, MD
3
Star Rating
KENSINGTON, MD-based SIGNAL FINANCIAL is an NCUA-insured credit union started in 1947. The credit union has $383.9 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 28 full-time employees, the credit union holds loans and leases worth $294.9 million. SIGNAL FINANCIAL's 22,338 members currently have $305.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SIGNAL FINANCIAL exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It acts as a buffer against losses and as protection for members when a credit union is experiencing economic instability. From a safety and soundness perspective, the higher the capital, the better.

SIGNAL FINANCIAL received a score of 10 out of a possible 30 points on our test to measure capital adequacy, falling short of the national average of 15.65.

SIGNAL FINANCIAL appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, worse than 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 problem assets, such as unpaid mortgages.

Having lots of these types of assets may eventually require a credit union to use capital to cover losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

SIGNAL FINANCIAL scored 36 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.09.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.

SIGNAL FINANCIAL fell short of the national average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.