Safe and Sound

STAR OF TEXAS

AUSTIN, TX
4
Star Rating
STAR OF TEXAS is an AUSTIN, TX-based, NCUA-insured credit union founded in 1952. Regulatory filings show the credit union having $35.5 million in assets, as of December 31, 2017.

Thanks to the efforts of 11 full-time employees, the credit union has amassed loans and leases worth $15.7 million. STAR OF TEXAS's 3,400 members currently have $30.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, STAR OF TEXAS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial strength. It acts as a bulwark against losses and affords protection for members during times of economic instability for the credit union. When looking at safety and soundness, the more capital, the better.

STAR OF TEXAS received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

STAR OF TEXAS's capitalization ratio of 14.00 percent in our test was lower than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves 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 cover losses, shrinking 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.

STAR OF TEXAS scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

A below-average ratio of troubled 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 earnings performance affects its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the credit union better prepared to withstand economic trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, STAR OF TEXAS scored 8 out of a possible 30, below the national average of 10.11.

One indication that STAR OF TEXAS is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.