Safe and Sound

THE STATE

CHARLESTON, WV
5
Star Rating
CHARLESTON, WV-based THE STATE is an NCUA-insured credit union founded in 1988. The credit union has assets of $67.5 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 13 full-time employees, the credit union has amassed loans and leases worth $36.6 million. THE STATE's 8,734 members currently have $56.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, THE STATE exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three important criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is key. It acts as a bulwark against losses and as protection for members when a credit union is experiencing financial trouble. When looking at safety and soundness, more capital is better.

THE STATE racked up 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

THE STATE's capitalization ratio of 20.00 percent in our test was better than the average for all credit unions, a sign that it's on more solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these kinds of assets could eventually be required to use capital to cover losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the risk of a failure in the future.

On Bankrate's asset quality test, THE STATE scored 40 out of a possible 40 points, above the national average of 38.09 points.

A below-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 earnings performance affects its long-term survivability. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, are less able to do those things.

THE STATE did above-average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

One indication that the credit union is doing better than 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.