Safe and Sound

AOD

BYNUM, AL
4
Star Rating
BYNUM, AL-based AOD is an NCUA-insured credit union started in 1950. Regulatory filings show the credit union having $289.6 million in assets, as of December 31, 2017.

Thanks to the work of 79 full-time employees, the credit union holds loans and leases worth $165.9 million. AOD's 33,128 members currently have $251.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AOD exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during periods of economic trouble for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is essential. From a safety and soundness perspective, the higher the capital, the better.

AOD scored 18 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, better than the national average of 15.65.

AOD's capitalization ratio of 18.00 percent in our test was higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with a large number of these kinds of assets could eventually be required to use capital to cover losses, reducing its equity cushion. 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.

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

Troubled assets made up 0.00 percent of the credit union's total assets in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

AOD fell behind the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

AOD had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's outperforming 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.