Safe and Sound

UNIVERSITY OF WISCONSIN

Madison, WI
5
Star Rating
Started in 1931, UNIVERSITY OF WISCONSIN is an NCUA-insured credit union based in Madison, WI. Regulatory filings show the credit union having $2.56 billion in assets, as of December 31, 2017.

Thanks to the work of 480 full-time employees, the credit union has amassed loans and leases worth $1.82 billion. Its 239,722 members currently have $2.23 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UNIVERSITY OF WISCONSIN exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members during periods of economic instability for the credit union. It follows then that when it comes to measuring an an institution's financial resilience, capital is essential. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, UNIVERSITY OF WISCONSIN received a score of 10 out of a possible 30 points, less than the national average of 15.65.

UNIVERSITY OF WISCONSIN had a capitalization ratio of 10.00 percent in our test, 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 loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets suggests a credit union could eventually have to use capital to absorb losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

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

A credit union's ability to earn money has an effect on 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, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, UNIVERSITY OF WISCONSIN scored 24 out of a possible 30, exceeding the national average of 10.11.

One sign that UNIVERSITY OF WISCONSIN is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.