Safe and Sound

SOUTH TOWNS COMMUNITY

LACKAWANNA, NY
3
Star Rating
SOUTH TOWNS COMMUNITY is a LACKAWANNA, NY-based, NCUA-insured credit union started in 1967. Regulatory filings show the credit union having assets of $15.7 million, as of December 31, 2017.

With 3 full-time employees, the credit union currently holds loans and leases worth $5.8 million. SOUTH TOWNS COMMUNITY's 2,512 members currently have $14.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTH TOWNS COMMUNITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial resilience. It acts as a buffer against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is better.

SOUTH TOWNS COMMUNITY fell short of the national average of 15.65 on our test to measure capital adequacy, racking up 6 out of a possible 30 points.

SOUTH TOWNS COMMUNITY's capitalization ratio of 6.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these types of assets may eventually be forced to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a failure in the future.

SOUTH TOWNS COMMUNITY exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-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 long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's test of earnings, SOUTH TOWNS COMMUNITY scored 8 out of a possible 30, below the national average of 10.11.

One sign that SOUTH TOWNS COMMUNITY is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.