Safe and Sound

WACONIZED

WACO, TX
5
Star Rating
WACONIZED is a Waco, TX-based, NCUA-insured credit union founded in 1947. As of December 31, 2017, the credit union held assets of $4.3 million.

With 2 full-time employees, the credit union has amassed loans and leases worth $2.2 million. WACONIZED's 539 members currently have $3.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, WACONIZED exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial stability, capital is key. When it comes to safety and soundness, the more capital, the better.

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

WACONIZED appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 30.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these types of assets may eventually have to use capital to cover losses, diminishing its equity buffer. 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 reduced earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, WACONIZED scored 36 out of a possible 40 points, failing to reach the national average of 38.09 points.

Troubled assets made up 0.00 percent of WACONIZED's total assets in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

WACONIZED underperformed the average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's running ahead of its peers in this area.

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.