Safe and Sound

TRANSIT

VALLEY STREAM, NY
4
Star Rating
VALLEY STREAM, NY-based TRANSIT is an NCUA-insured credit union started in 1974. As of December 31, 2017, the credit union held assets of $13.7 million.

With 4 full-time employees, the credit union has amassed loans and leases worth $2.0 million. TRANSIT's 4,130 members currently have $12.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TRANSIT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a valuable measurement of its financial resilience. When it comes to safety and soundness, more capital is better.

TRANSIT exceeded the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 16 out of a possible 30 points.

TRANSIT's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

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 extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a future failure.

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

A lower-than-average ratio of problem 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 earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

TRANSIT scored 2 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

TRANSIT had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating its peers in this area.

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.