Safe and Sound

AUSTIN TELCO

Austin, TX
5
Star Rating
Austin, TX-based AUSTIN TELCO is an NCUA-insured credit union started in 1941. As of December 31, 2017, the credit union had assets of $1.46 billion.

Members have $930.3 million on deposit tended by 148 full-time employees. With that footprint, the credit union currently holds loans and leases worth $930.3 million. AUSTIN TELCO's 84,630 members currently have $1.27 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AUSTIN TELCO exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is crucial. It works as a bulwark against losses and as protection for members when a credit union is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, AUSTIN TELCO racked up 16 out of a possible 30 points, above the national average of 15.65.

AUSTIN TELCO had a capitalization ratio of 16.00 percent in our test, identical the average for all credit unions, an indication that it's right in line with its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets may eventually force a credit union to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's earnings test, AUSTIN TELCO scored 18 out of a possible 30, beating the national average of 10.11.

One indication that the credit union is outperforming 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.