Safe and Sound

UNIVERSITY

AUSTIN, TX
4
Star Rating
UNIVERSITY is an AUSTIN, TX-based, NCUA-insured credit union that opened its doors in 1936. The credit union holds assets of $2.21 billion, according to June 30, 2017, regulatory filings.

Thanks to the work of 645 full-time employees, the credit union has amassed loans and leases worth $1.89 billion. UNIVERSITY's 225,737 members currently have $1.96 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, UNIVERSITY exhibited a good condition, earning 4 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 acts as a buffer against losses and as protection for members during times of financial instability for the credit union. It follows then that a credit union's level of capital is an important measurement of its financial resilience. When looking at safety and soundness, more capital is preferred.

UNIVERSITY received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.26.

UNIVERSITY's capitalization ratio of 8.00 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 past-due loans.

A credit union with large numbers of these types of assets may eventually be required to use capital to absorb losses, shrinking its cushion of equity. 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 future failure.

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

A below-average ratio of problem assets of 2.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, likely making the credit union better able to withstand financial shocks. Obviously, credit unions that are losing money are less able to do those things.

UNIVERSITY scored 16 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.31.

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 doing better than 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.