Safe and Sound

TOWNS-UNION EDUCATORS'

Young Harris, GA
5
Star Rating
Young Harris, GA-based TOWNS-UNION EDUCATORS' is an NCUA-insured credit union started in 1976. Regulatory filings show the credit union having assets of $2.6 million, as of December 31, 2017.

The credit union has amassed loans and leases worth $1.2 million. TOWNS-UNION EDUCATORS''s 535 members currently have $2.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TOWNS-UNION EDUCATORS' exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark 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 fortitude, capital is essential. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, TOWNS-UNION EDUCATORS' received a score of 8 out of a possible 30 points, below the national average of 15.65.

TOWNS-UNION EDUCATORS''s capitalization ratio of 8.00 percent in our test was below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these kinds of assets may eventually force a credit union to use capital to absorb losses, decreasing its equity buffer. 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, resulting in depressed earnings and potentially more risk of a future failure.

TOWNS-UNION EDUCATORS' did better than the national average of 38.09 on Bankrate's asset quality test, 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 superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money 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 more resilient in times of trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

TOWNS-UNION EDUCATORS' scored 26 out of a possible 30 on Bankrate's earnings test, beating the national average of 10.11.

One indication that TOWNS-UNION EDUCATORS' 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.