Safe and Sound

SOUTH TEXAS

McALLEN, TX
2
Star Rating
SOUTH TEXAS is an NCUA-insured credit union started in 1952 and currently headquartered in McALLEN, TX. As of December 31, 2017, the credit union held assets of $43.6 million.

Thanks to the efforts of 21 full-time employees, the credit union has amassed loans and leases worth $30.0 million. Its 7,271 members currently have $40.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTH TEXAS exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during times of financial instability for the credit union. It follows then that an institution's level of capital is an essential measurement of its financial fortitude. When looking at safety and soundness, the higher the capital, the better.

SOUTH TEXAS scored below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 4 out of a possible 30 points.

SOUTH TEXAS had a capitalization ratio of 4.00 percent in our test, lower than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these types of assets may eventually have to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and elevating the chances of a failure in the future.

SOUTH TEXAS fell below the national average of 38.09 on Bankrate's asset quality test, racking up 32 out of a possible 40 points .

A below-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

A credit union's profitability affects its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, diminish a credit union's ability to do those things.

SOUTH TEXAS scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

One sign that SOUTH TEXAS is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.

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.