Safe and Sound

VELOCITY

Austin, TX
3
Star Rating
Austin, TX-based VELOCITY is an NCUA-insured credit union started in 1947. As of December 31, 2017, the credit union held assets of $863.2 million.

Members have $657.2 million on deposit tended by 172 full-time employees. With that footprint, the credit union holds loans and leases worth $657.2 million. VELOCITY's 86,825 members currently have $687.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, VELOCITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members during times of economic instability for the credit union. Therefore, an institution's level of capital is a valuable measurement of its financial resilience. From a safety and soundness perspective, the more capital, the better.

VELOCITY came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 12 out of a possible 30 points.

VELOCITY had a capitalization ratio of 12.00 percent in our test, lower than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

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

Having a large number of these types of assets may eventually force a credit union to use capital to absorb 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 interest for the credit union, decreasing earnings and increasing the risk of a failure in the future.

VELOCITY scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.

Troubled assets made up 0.00 percent of VELOCITY's total assets in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

VELOCITY scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

One sign that VELOCITY is running ahead of 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.