Safe and Sound

COAST-TEL

SALINAS, CA
4
Star Rating
COAST-TEL is a SALINAS, CA-based, NCUA-insured credit union founded in 1959. The credit union has assets of $18.8 million, according to December 31, 2017, regulatory filings.

With 5 full-time employees, the credit union currently holds loans and leases worth $8.3 million. COAST-TEL's 3,212 members currently have $17.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, COAST-TEL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial strength, capital is key. When it comes to safety and soundness, the higher the capital, the better.

COAST-TEL scored below the national average of 15.65 on our test to measure capital adequacy, scoring 6 out of a possible 30 points.

COAST-TEL appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 6.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

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

Having large numbers of these kinds of assets may eventually force a credit union to use capital to absorb losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and increasing the chances of a future failure.

COAST-TEL scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.09.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

COAST-TEL scored 16 out of a possible 30 on Bankrate's earnings test, exceeding 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, suggesting 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.