Safe and Sound

SOUTHWEST COMMUNITIES

Carnegie, PA
3
Star Rating
SOUTHWEST COMMUNITIES is a Carnegie, PA-based, NCUA-insured credit union started in 1939. Regulatory filings show the credit union having assets of $15.2 million, as of December 31, 2017.

With 4 full-time employees, the credit union currently holds loans and leases worth $8.0 million. SOUTHWEST COMMUNITIES's 2,114 members currently have $13.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST COMMUNITIES 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 grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is experiencing economic trouble. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is crucial. From a safety and soundness perspective, the higher the capital, the better.

SOUTHWEST COMMUNITIES received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

SOUTHWEST COMMUNITIES had a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having lots of these types of assets may eventually require a credit union to use capital to cover losses, diminishing its cushion 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 depressed earnings and potentially more risk of a failure in the future.

SOUTHWEST COMMUNITIES scored 32 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.09.

Troubled assets made up 0.00 percent of SOUTHWEST COMMUNITIES's total assets in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union better prepared to withstand financial trouble. Conversely, losses take away from a credit union's ability to do those things.

SOUTHWEST COMMUNITIES scored 4 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 10.11.

SOUTHWEST COMMUNITIES had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.