Safe and Sound

SOUTHWEST AIRLINES

Dallas, TX
4
Star Rating
Dallas, TX-based SOUTHWEST AIRLINES is an NCUA-insured credit union started in 1975. Regulatory filings show the credit union having $515.9 million in assets, as of December 31, 2017.

Members have $353.0 million on deposit tended by 97 full-time employees. With that footprint, the credit union has amassed loans and leases worth $353.0 million. Its 52,358 members currently have $453.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST AIRLINES 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 major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during times of financial instability for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is valuable. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, SOUTHWEST AIRLINES received a score of 12 out of a possible 30 points, below the national average of 15.65.

SOUTHWEST AIRLINES had a capitalization ratio of 12.00 percent in our test, less than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due loans.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to absorb losses, cutting down on 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, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, SOUTHWEST AIRLINES scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

Troubled assets made up 0.00 percent of SOUTHWEST AIRLINES's total assets in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's test of earnings, SOUTHWEST AIRLINES scored 16 out of a possible 30, beating out the national average of 10.11.

One indication that SOUTHWEST AIRLINES is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.