Asset Quality Score
Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
Having lots of these kinds of assets could eventually force a credit union to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, decreasing earnings and elevating the chances of a failure in the future.
On Bankrate's test of asset quality, HFS scored 40 out of a possible 40 points, exceeding the national average of 38.15 points.
HFS's ratio of troubled assets was 5.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.