Safe and Sound

AVESTAR

WATERLOO, WI
4
Star Rating
AVESTAR is a WATERLOO, WI-based, NCUA-insured credit union that opened its doors in 1964. As of December 31, 2017, the credit union held assets of $25.8 million.

Thanks to the efforts of 10 full-time employees, the credit union currently holds loans and leases worth $19.4 million. AVESTAR's 3,177 members currently have $23.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AVESTAR exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is useful. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

AVESTAR fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 8 out of a possible 30 points.

AVESTAR had a capitalization ratio of 8.00 percent in our test, lower than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets may eventually have to use capital to absorb losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and increasing the risk of a failure in the future.

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

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

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

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

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's doing better than 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.