Safe and Sound

VELOCITY

Austin, TX
3
Star Rating
VELOCITY is an NCUA-insured credit union started in 1947 and currently based in Austin, TX. The credit union holds assets of $854.1 million, according to June 30, 2017, regulatory filings.

With 184 full-time employees, the credit union currently holds loans and leases worth $679.4 million. VELOCITY's 87,386 members currently have $677.4 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, VELOCITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is useful. It works as a buffer against losses and provides protection for members during periods of economic instability for the credit union. From a safety and soundness perspective, the more capital, the better.

VELOCITY scored below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, achieving a score of 12 out of a possible 30 points.

VELOCITY appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 11.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

A credit union with a large number of these kinds of assets could eventually be required to use capital to absorb losses, shrinking 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, diminishing earnings and increasing the risk of a future failure.

On Bankrate's test of asset quality, VELOCITY scored 36 out of a possible 40 points, coming in below the national average of 38.15 points.

VELOCITY's ratio of problem assets was 7.00 percent in our test, the same as the national average.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with 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.

VELOCITY scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 10.31.

One indication that VELOCITY is lagging behind its peers in this area was its earnings ratio of -11.00 percent in our test, less 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.