Safe and Sound

ALLIANCE

LUBBOCK, TX
5
Star Rating
LUBBOCK, TX-based ALLIANCE is an NCUA-insured credit union started in 1940. As of December 31, 2017, the credit union held assets of $240.8 million.

Members have $175.4 million on deposit tended by 85 full-time employees. With that footprint, the credit union has amassed loans and leases worth $175.4 million. ALLIANCE's 21,688 members currently have $189.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ALLIANCE exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members during times of financial trouble for the credit union. Therefore, an institution's level of capital is an essential measurement of its financial strength. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, ALLIANCE scored 22 out of a possible 30 points, exceeding the national average of 15.65.

ALLIANCE had a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

This test is intended 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.

Having a large number of these kinds of assets means a credit union may eventually have to use capital to cover losses, cutting down on its equity buffer. 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.

ALLIANCE scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand economic trouble. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's earnings test, ALLIANCE scored 16 out of a possible 30, exceeding the national average of 10.11.

ALLIANCE had an earnings ratio of 0.00 percent in our test, above 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.