Safe and Sound

S.T.E.C.

NURSERY, TX
5
Star Rating
S.T.E.C. is an NCUA-insured credit union founded in 1968 and currently headquartered in NURSERY, TX. The credit union holds $8.0 million in assets, according to December 31, 2017, regulatory filings.

The credit union currently holds loans and leases worth $2.3 million. S.T.E.C.'s 841 members currently have $6.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, S.T.E.C. exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members during times of financial trouble for the credit union. It follows then that a credit union's level of capital is a valuable measurement of its financial resilience. From a safety and soundness perspective, the higher the capital, the better.

S.T.E.C. scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 20 out of a possible 30 points.

S.T.E.C.'s capitalization ratio of 20.00 percent in our test was above the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these kinds of assets means a credit union could have to use capital to cover losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, S.T.E.C. scored 40 out of a possible 40 points, beating the national average of 38.09 points.

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

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand financial trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's earnings test, S.T.E.C. scored 18 out of a possible 30, exceeding the national average of 10.11.

S.T.E.C. 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.