Safe and Sound

STAR CITY

Roanoke, VA
2
Star Rating
STAR CITY is a Roanoke, VA-based, NCUA-insured credit union started in 1976. As of December 31, 2017, the credit union had assets of $3.3 million.

Members have $2.1 million on deposit tended by 2 full-time employees. With that footprint, the credit union currently holds loans and leases worth $2.1 million. STAR CITY's 615 members currently have $3.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, STAR CITY exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial resilience. It works as a cushion against losses and as protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, STAR CITY received a score of 6 out of a possible 30 points, coming in below the national average of 15.65.

STAR CITY appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 6.00 percent in our test, worse than the average for all credit unions.

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 problem assets, such as past-due mortgages.

Having lots of these types of assets suggests a credit union could have to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, STAR CITY scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

A lower-than-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 profitability has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

STAR CITY scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 10.11.

One indication that STAR CITY is running ahead of 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.