Safe and Sound

TRI COUNTY AREA

Pottstown, PA
3
Star Rating
Pottstown, PA-based TRI COUNTY AREA is an NCUA-insured credit union started in 1949. As of December 31, 2017, the credit union held assets of $126.8 million.

Thanks to the efforts of 39 full-time employees, the credit union holds loans and leases worth $88.6 million. Its 13,743 members currently have $116.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TRI COUNTY AREA exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to grade American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is experiencing economic instability. It follows then that an institution's level of capital is a crucial measurement of its financial resilience. When looking at safety and soundness, the higher the capital, the better.

TRI COUNTY AREA fell short of the national average of 15.65 on our test to measure capital adequacy, scoring 6 out of a possible 30 points.

TRI COUNTY AREA appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 6.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

Having lots of these kinds of assets could eventually force a credit union to use capital to absorb losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, TRI COUNTY AREA scored 36 out of a possible 40 points, less than the national average of 38.09 points.

Troubled assets made up 0.00 percent of TRI COUNTY AREA's total assets in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, TRI COUNTY AREA scored 10 out of a possible 30, failing to reach the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's outperforming 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.