Safe and Sound

TWINSTAR

OLYMPIA, WA
4
Star Rating
OLYMPIA, WA-based TWINSTAR is an NCUA-insured credit union started in 1938. As of June 30, 2017, the credit union held assets of $1.22 billion.

Thanks to the work of 345 full-time employees, the credit union currently holds loans and leases worth $967.5 million. Its 119,579 members currently have $1.08 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, TWINSTAR exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a credit union's financial strength. It works as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, TWINSTAR received a score of 10 out of a possible 30 points, failing to reach the national average of 15.26.

TWINSTAR's capitalization ratio of 10.00 percent in our test was worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

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 unpaid loans.

Having large numbers of these kinds of assets could eventually force a credit union to use capital to cover losses, cutting down on its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

TWINSTAR did better than the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

TWINSTAR's ratio of problem assets was 5.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. 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 times of trouble. Conversely, losses diminish a credit union's ability to do those things.

TWINSTAR exceeded the national average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

The credit union had an earnings ratio of 7.00 percent in our test, higher 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.