Safe and Sound

TLCU FINANCIAL

Mishawaka, IN
4
Star Rating
Mishawaka, IN-based TLCU FINANCIAL is an NCUA-insured credit union founded in 1953. The credit union has $35.8 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 11 full-time employees, the credit union has amassed loans and leases worth $11.3 million. TLCU FINANCIAL's 4,344 members currently have $29.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TLCU FINANCIAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at 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 cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial strength, capital is crucial. When it comes to safety and soundness, the more capital, the better.

TLCU FINANCIAL did better than the national average of 15.65 points on our test to measure capital adequacy, achieving a score of 22 out of a possible 30 points.

TLCU FINANCIAL had a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions, suggesting that it could be more resilient in a crisis than its peers.

Asset Quality Score

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

Having lots of these types of assets could eventually require a credit union 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 thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

TLCU FINANCIAL scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

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 profitability has an effect on its safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand economic shocks. Conversely, losses lessen a credit union's ability to do those things.

TLCU FINANCIAL did below-average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

One indication that the credit union is doing better than 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.