Safe and Sound

CAPITAL AREA TAIWANESE

Boyds, MD
5
Star Rating
Started in 1977, CAPITAL AREA TAIWANESE is an NCUA-insured credit union headquartered in Boyds, MD. The credit union has assets of $11.9 million, according to December 31, 2017, regulatory filings.

Its 497 members currently have $10.5 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $9.9 million.

Overall, Bankrate believes that, as of December 31, 2017, CAPITAL AREA TAIWANESE exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major criteria Bankrate used to score American 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 an institution's financial stability, capital is crucial. It works as a cushion against losses and provides protection for members when a credit union is experiencing economic instability. When looking at safety and soundness, the more capital, the better.

CAPITAL AREA TAIWANESE received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, lower than the national average of 15.65.

CAPITAL AREA TAIWANESE appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

Having large numbers of these types of assets suggests a credit union may have to use capital to cover losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a future failure.

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

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

CAPITAL AREA TAIWANESE scored 22 out of a possible 30 on Bankrate's earnings test, above the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's outperforming 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.