Safe and Sound

TOWN OF PALM BEACH

WEST PALM BEACH, FL
2
Star Rating
TOWN OF PALM BEACH is a WEST PALM BEACH, FL-based, NCUA-insured credit union that opened its doors in 1965. The credit union has $2.9 million in assets, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $1.3 million. TOWN OF PALM BEACH's 377 members currently have $2.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TOWN OF PALM BEACH exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is crucial. It acts as a buffer against losses and provides protection for members during times of financial trouble for the credit union. From a safety and soundness perspective, the more capital, the better.

TOWN OF PALM BEACH received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 15.65.

TOWN OF PALM BEACH appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

This test is intended to try to understand 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 unpaid mortgages.

Having lots of these types of assets suggests a credit union could eventually have to use capital to absorb losses, reducing its equity buffer. 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 diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, TOWN OF PALM BEACH scored 32 out of a possible 40 points, falling short of the national average of 38.09 points.

Troubled assets made up 0.00 percent of TOWN OF PALM BEACH's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

TOWN OF PALM BEACH scored 2 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 10.11.

TOWN OF PALM BEACH had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.