Safe and Sound

BATON ROUGE TELCO

Baton Rouge, LA
4
Star Rating
BATON ROUGE TELCO is a BATON ROUGE, LA-based, NCUA-insured credit union started in 1936. Regulatory filings show the credit union having assets of $292.9 million, as of December 31, 2017.

With 71 full-time employees, the credit union currently holds loans and leases worth $264.7 million. Its 27,784 members currently have $258.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BATON ROUGE TELCO exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key 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 buffer against losses and as protection for members during times of financial instability for the credit union. Therefore, an institution's level of capital is a crucial measurement of its financial strength. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, BATON ROUGE TELCO received a score of 14 out of a possible 30 points, less than the national average of 15.65.

BATON ROUGE TELCO had a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is 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 unpaid mortgages.

Having a large number of these kinds of assets means a credit union could have to use capital to absorb losses, decreasing its equity cushion. 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.

BATON ROUGE TELCO scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

BATON ROUGE TELCO's ratio of problem assets was 0.00 percent in our test, lower 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 affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand financial trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's test of earnings, BATON ROUGE TELCO scored 14 out of a possible 30, beating the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication 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.