Safe and Sound

TONGASS

KETCHIKAN, AK
4
Star Rating
KETCHIKAN, AK-based TONGASS is an NCUA-insured credit union started in 1963. The credit union has assets of $77.0 million, according to December 31, 2017, regulatory filings.

Members have $50.9 million on deposit tended by 30 full-time employees. With that footprint, the credit union has amassed loans and leases worth $50.9 million. Its 7,809 members currently have $70.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TONGASS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of an institution's financial strength. It works as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.

TONGASS received a score of 8 out of a possible 30 points on our test to measure capital adequacy, below the national average of 15.65.

TONGASS's capitalization ratio of 8.00 percent in our test was worse 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's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having large numbers of these kinds of assets suggests a credit union could eventually have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, TONGASS scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

The credit union's ratio of problem assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. Conversely, losses reduce a credit union's ability to do those things.

TONGASS did above-average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

One sign that the credit union is outperforming 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.