Safe and Sound

TOMAH AREA

TOMAH, WI
4
Star Rating
TOMAH AREA is a TOMAH, WI-based, NCUA-insured credit union that opened its doors in 1939. The credit union has $60.3 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 19 full-time employees, the credit union has amassed loans and leases worth $45.2 million. TOMAH AREA's 6,983 members currently have $53.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TOMAH AREA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is valuable. It acts as a cushion against losses and provides protection for members when a credit union is experiencing economic trouble. When it comes to safety and soundness, the more capital, the better.

TOMAH AREA came in below the national average of 15.65 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

TOMAH AREA's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, a sign that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with large numbers of these types of assets could eventually have to use capital to absorb losses, diminishing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, decreasing earnings and elevating the risk of a future failure.

TOMAH AREA scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

Troubled assets made up 0.00 percent of TOMAH AREA'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 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. Losses, on the other hand, lessen a credit union's ability to do those things.

TOMAH AREA received below-average marks on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One sign that TOMAH AREA 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.