Safe and Sound

DATCU

DENTON, TX
5
Star Rating
DATCU is an NCUA-insured credit union started in 1936 and currently based in DENTON, TX. As of June 30, 2017, the credit union held assets of $933.1 million.

Members have $769.7 million on deposit tended by 194 full-time employees. With that footprint, the credit union has amassed loans and leases worth $769.7 million. Its 92,125 members currently have $795.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, DATCU exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to evaluate U.S. 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 a credit union's financial resilience, capital is important. It acts as a buffer against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

DATCU achieved a score of 20 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.26.

DATCU's capitalization ratio of 14.00 percent in our test was above the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

This test's purpose is 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 troubled assets, such as past-due mortgages.

Having extensive holdings of these kinds of assets suggests a credit union could have to use capital to cover losses, cutting down on its equity cushion. 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 reduced earnings and potentially more risk of a failure in the future.

DATCU beat out the national average of 38.15 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A below-average ratio of troubled assets of 2.00 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 has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, DATCU scored 18 out of a possible 30, above the national average of 10.31.

One indication that DATCU is beating its peers in this area was its earnings ratio of 9.00 percent in our test, higher 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.