Safe and Sound

SOUTHERN MIDDLESEX CO TCHRS

East Brunswick, NJ
4
Star Rating
East Brunswick, NJ-based SOUTHERN MIDDLESEX CO TCHRS is an NCUA-insured credit union started in 1939. As of December 31, 2017, the credit union held assets of $34.2 million.

Thanks to the efforts of 5 full-time employees, the credit union has amassed loans and leases worth $10.0 million. Its 3,357 members currently have $30.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHERN MIDDLESEX CO TCHRS 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 important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial strength. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

SOUTHERN MIDDLESEX CO TCHRS fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 10 out of a possible 30 points.

SOUTHERN MIDDLESEX CO TCHRS had a capitalization ratio of 10.00 percent in our test, below the average for all credit unions, an indication that it's weaker than its peers.

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 troubled assets, such as unpaid mortgages.

Having lots of these types of assets means a credit union could have to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, SOUTHERN MIDDLESEX CO TCHRS scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

The credit union's ratio of problem assets was 0.00 percent in our test, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's earnings test, SOUTHERN MIDDLESEX CO TCHRS scored 6 out of a possible 30, failing to reach the national average of 10.11.

One sign that SOUTHERN MIDDLESEX CO TCHRS is outperforming 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.