Safe and Sound

SOMERVILLE SCHOOL EMPLOYEES

SOMERVILLE, MA
4
Star Rating
SOMERVILLE SCHOOL EMPLOYEES is a SOMERVILLE, MA-based, NCUA-insured credit union dating back to 1939. Regulatory filings show the credit union having assets of $27.3 million, as of December 31, 2017.

Thanks to the work of 3 full-time employees, the credit union holds loans and leases worth $8.9 million. Its 1,894 members currently have $23.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOMERVILLE SCHOOL EMPLOYEES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial fortitude, capital is key. When looking at safety and soundness, the higher the capital, the better.

SOMERVILLE SCHOOL EMPLOYEES beat out the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 20 out of a possible 30 points.

SOMERVILLE SCHOOL EMPLOYEES appears to be stronger than its peers, with a capitalization ratio of 20.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

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

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 profitability affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial shocks. Conversely, losses diminish a credit union's ability to do those things.

SOMERVILLE SCHOOL EMPLOYEES received below-average marks on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

One indication that the credit union is beating 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.