WHAT IS
SAFE AND SOUND?
Capital is a key measurement of an institution's financial fortitude. It works as a bulwark against losses and as protection for members during times of economic instability for the credit union. When looking at safety and soundness, the higher the capital, the better.
AWAKON fell below the national average of 15.65 on our test to measure capital adequacy, racking up 12 out of a possible 30 points.
AWAKON had a capitalization ratio of 12.00 percent in our test, below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.
This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.
Having lots of these kinds of assets suggests a credit union could have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and elevating the chances of a future failure.
AWAKON scored below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .
Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath the national average and suggestive of greater financial strength than other credit unions.
How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.
AWAKON beat the national average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.
AWAKON had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's doing better than its peers in this area.
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.
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.