Safe and Sound

SPIRIT FINANCIAL

LEVITTOWN, PA
4
Star Rating
SPIRIT FINANCIAL is a LEVITTOWN, PA-based, NCUA-insured credit union founded in 1953. The credit union has $48.7 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 9 full-time employees, the credit union has amassed loans and leases worth $18.4 million. SPIRIT FINANCIAL's 3,811 members currently have $41.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SPIRIT FINANCIAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is key. It works as a cushion against losses and affords protection for members during periods of financial trouble for the credit union. When it comes to safety and soundness, more capital is better.

SPIRIT FINANCIAL scored 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, exceeding the national average of 15.65.

SPIRIT FINANCIAL had a capitalization ratio of 20.00 percent in our test, above the average for all credit unions, a sign that it's more well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets may eventually have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and increasing the chances of a future failure.

SPIRIT FINANCIAL beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem 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, likely making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's earnings test, SPIRIT FINANCIAL scored 6 out of a possible 30, failing to reach the national average of 10.11.

SPIRIT FINANCIAL had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign that it's doing better than 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.