Safe and Sound

AMERICAN SOUTHWEST

Sierra Vista, AZ
4
Star Rating
Sierra Vista, AZ-based AMERICAN SOUTHWEST is an NCUA-insured credit union started in 1955. Regulatory filings show the credit union having $223.0 million in assets, as of December 31, 2017.

Thanks to the work of 59 full-time employees, the credit union currently holds loans and leases worth $123.3 million. Its 22,283 members currently have $201.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AMERICAN SOUTHWEST exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to score American credit unions.

WHAT IS
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 when a credit union is experiencing economic instability. Therefore, a credit union's level of capital is a crucial measurement of its financial resilience. From a safety and soundness perspective, the more capital, the better.

AMERICAN SOUTHWEST 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 15.65.

AMERICAN SOUTHWEST's capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble 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 troubled assets, such as unpaid mortgages.

A credit union with large numbers of these types of assets may eventually have to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the risk of a failure in the future.

AMERICAN SOUTHWEST exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

The credit union's ratio of troubled assets was 0.00 percent in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, 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 are less able to do those things.

On Bankrate's test of earnings, AMERICAN SOUTHWEST scored 10 out of a possible 30, below the national average of 10.11.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.