Safe and Sound

TOWER

LAUREL, MD
4
Star Rating
Started in 1953, TOWER is an NCUA-insured credit union headquartered in LAUREL, MD. As of December 31, 2017, the credit union had assets of $2.96 billion.

With 471 full-time employees, the credit union holds loans and leases worth $2.15 billion. TOWER's 173,530 members currently have $2.55 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TOWER exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It works as a buffer against losses and provides protection for members during times of economic trouble for the credit union. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, TOWER received a score of 14 out of a possible 30 points, coming in below the national average of 15.65.

TOWER appears to be weaker than its peers in this area, with a capitalization ratio of 14.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these types of assets may eventually be forced to use capital to cover 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 future failure.

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

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

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's earnings test, TOWER scored 14 out of a possible 30, above the national average of 10.11.

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, 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.