Safe and Sound

VALLEY

TUSCUMBIA, AL
4
Star Rating
TUSCUMBIA, AL-based VALLEY is an NCUA-insured credit union founded in 1956. The credit union has assets of $69.7 million, according to December 31, 2017, regulatory filings.

With 23 full-time employees, the credit union currently holds loans and leases worth $28.8 million. VALLEY's 6,645 members currently have $57.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, VALLEY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for members during periods of economic trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial resilience, capital is valuable. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, VALLEY achieved a score of 26 out of a possible 30 points, beating the national average of 15.65.

VALLEY's capitalization ratio of 26.00 percent in our test was above the average for all credit unions, suggesting that it's on more solid financial footing than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid mortgages.

A credit union with a large number of these types of assets could eventually have to use capital to absorb losses, diminishing 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, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, VALLEY scored 36 out of a possible 40 points, less than 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 greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. 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 tough times. Credit unions that are losing money, however, are less able to do those things.

VALLEY received below-average marks on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.