Safe and Sound

TEACHERS ALLIANCE

LONGVIEW, TX
4
Star Rating
LONGVIEW, TX-based TEACHERS ALLIANCE is an NCUA-insured credit union started in 1956. The credit union has assets of $1.3 million, according to December 31, 2017, regulatory filings.

Its 591 members currently have $932,536 in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $387,140.

Overall, Bankrate believes that, as of December 31, 2017, TEACHERS ALLIANCE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is valuable. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, TEACHERS ALLIANCE racked up 30 out of a possible 30 points, beating out the national average of 15.65.

TEACHERS ALLIANCE appears to be stronger than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

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

Having a large number of these types of assets means a credit union could have to use capital to absorb losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

TEACHERS ALLIANCE scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 38.09.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

TEACHERS ALLIANCE underperformed the average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

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.