Safe and Sound

CHEROKEE COUNTY

RUSK, TX
5
Star Rating
Founded in 1960, CHEROKEE COUNTY is an NCUA-insured credit union based in RUSK, TX. As of June 30, 2017, the credit union had assets of $31.7 million.

With 11 full-time employees, the credit union has amassed loans and leases worth $20.6 million. Its 4,417 members currently have $24.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, CHEROKEE COUNTY exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three important criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is key. It acts as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, the more capital, the better.

CHEROKEE COUNTY achieved a score of 30 out of a possible 30 points on our test to measure capital adequacy, beating out the national average of 15.26.

CHEROKEE COUNTY's capitalization ratio of 23.00 percent in our test was higher than the average for all credit unions, an indication that it's stronger than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due loans.

A credit union with extensive holdings of these kinds of assets may eventually be forced to use capital to cover losses, shrinking its cushion of equity. 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 increasing the chances of a future failure.

CHEROKEE COUNTY scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.15.

CHEROKEE COUNTY's ratio of problem assets was 3.00 percent in our test, lower than 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 affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money have less ability to do those things.

CHEROKEE COUNTY did below-average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

One indication that CHEROKEE COUNTY is beating its peers in this area was its earnings ratio of 4.00 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.