Safe and Sound

UNIVERSITY OF SOUTH ALABAMA

MOBILE, AL
4
Star Rating
UNIVERSITY OF SOUTH ALABAMA is an NCUA-insured credit union founded in 1960 and currently based in MOBILE, AL. As of December 31, 2017, the credit union held assets of $44.8 million.

Members have $12.3 million on deposit tended by 10 full-time employees. With that footprint, the credit union holds loans and leases worth $12.3 million. Its 8,651 members currently have $40.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UNIVERSITY OF SOUTH ALABAMA 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 major criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is essential. It acts as a bulwark against losses and as protection for members when a credit union is experiencing financial trouble. When it comes to safety and soundness, the higher the capital, the better.

UNIVERSITY OF SOUTH ALABAMA came in below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 10 out of a possible 30 points.

UNIVERSITY OF SOUTH ALABAMA's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine 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 require a credit union to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, UNIVERSITY OF SOUTH ALABAMA scored 40 out of a possible 40 points, beating the national average of 38.09 points.

UNIVERSITY OF SOUTH ALABAMA's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. Conversely, losses diminish a credit union's ability to do those things.

UNIVERSITY OF SOUTH ALABAMA scored 8 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

One indication that UNIVERSITY OF SOUTH ALABAMA 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.