Safe and Sound

AUBURN UNIVERSITY

AUBURN, AL
4
Star Rating
AUBURN, AL-based AUBURN UNIVERSITY is an NCUA-insured credit union started in 1960. The credit union holds assets of $181.5 million, according to December 31, 2017, regulatory filings.

With 28 full-time employees, the credit union holds loans and leases worth $68.7 million. AUBURN UNIVERSITY's 15,808 members currently have $161.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AUBURN UNIVERSITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is an essential measurement of its financial resilience. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, AUBURN UNIVERSITY received a score of 12 out of a possible 30 points, falling short of the national average of 15.65.

AUBURN UNIVERSITY's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these types of assets may eventually be required to use capital to cover losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the chances of a future failure.

AUBURN UNIVERSITY scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 38.09.

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

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money are less able to do those things.

AUBURN UNIVERSITY scored 12 out of a possible 30 on Bankrate's test of earnings, beating the national average of 10.11.

AUBURN UNIVERSITY 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.

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.