Safe and Sound

USALLIANCE

RYE, NY
4
Star Rating
RYE, NY-based USALLIANCE is an NCUA-insured credit union started in 1966. The credit union has $1.38 billion in assets, according to December 31, 2017, regulatory filings.

Members have $1.20 billion on deposit tended by 259 full-time employees. With that footprint, the credit union currently holds loans and leases worth $1.20 billion. Its 101,717 members currently have $917.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, USALLIANCE 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 major criteria Bankrate used to score American 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 important. It acts as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, USALLIANCE received a score of 6 out of a possible 30 points, lower than the national average of 15.65.

USALLIANCE had a capitalization ratio of 6.00 percent in our test, below the average for all credit unions, an indication that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these kinds of assets could eventually be required to use capital to absorb losses, shrinking 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, decreasing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, USALLIANCE scored 36 out of a possible 40 points, failing to reach 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

A credit union's earnings performance affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, USALLIANCE scored 20 out of a possible 30, better than the national average of 10.11.

One indication that USALLIANCE is outperforming 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.