Safe and Sound

TIP OF TEXAS

EL PASO, TX
4
Star Rating
TIP OF TEXAS is an NCUA-insured credit union founded in 1948 and currently headquartered in EL PASO, TX. Regulatory filings show the credit union having $23.1 million in assets, as of December 31, 2017.

With 10 full-time employees, the credit union has amassed loans and leases worth $9.7 million. TIP OF TEXAS's 3,757 members currently have $19.6 million in shares with the credit union.

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

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during times of economic instability for the credit union. It follows then that a credit union's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, TIP OF TEXAS scored 20 out of a possible 30 points, above the national average of 15.65.

TIP OF TEXAS had a capitalization ratio of 20.00 percent in our test, better than the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine 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 lots of these types of assets means a credit union may eventually have to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and increasing the risk of a failure in the future.

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

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

Earnings score

A credit union's ability to earn money affects its safety and soundness. 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 tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

TIP OF TEXAS scored 0 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

One indication that the credit union 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.