WHAT IS
SAFE AND SOUND?
Capital is an essential measurement of a credit union's financial fortitude. It works as a buffer against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.
AIR TECH exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 28 out of a possible 30 points.
AIR TECH had a capitalization ratio of 28.00 percent in our test, above the average for all credit unions, suggesting that it could be more resilient in a crisis than its peers.
Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.
Having large numbers of these kinds of assets could eventually require a credit union to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.
AIR TECH exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .
AIR TECH's ratio of problem assets was 0.00 percent in our test, less than the national average and potentially indicative of superior financial strength compared to other credit unions.
How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money have less ability to do those things.
On Bankrate's earnings test, AIR TECH scored 2 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, suggesting that it's running ahead of its peers in this area.
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.
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.