Safe and Sound

HTM AREA

troy, OH
5
Star Rating
HTM AREA is a troy, OH-based, NCUA-insured credit union founded in 1950. Regulatory filings show the credit union having $25.8 million in assets, as of June 30, 2017.

Thanks to the work of 5 full-time employees, the credit union has amassed loans and leases worth $17.6 million. Its 3,180 members currently have $21.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, HTM AREA 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 evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing economic instability. It follows then that a credit union's level of capital is a crucial measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, HTM AREA achieved a score of 22 out of a possible 30 points, better than the national average of 15.26.

HTM AREA's capitalization ratio of 16.00 percent in our test was better than the average for all credit unions, a sign that it's more well prepared for financial trouble 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 past-due loans.

Having lots of these kinds of assets means a credit union could eventually have to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, decreasing earnings and increasing the risk of a failure in the future.

HTM AREA beat out the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A below-average ratio of troubled assets of 4.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better able to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

HTM AREA scored 20 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.31.

One sign that HTM AREA is outperforming its peers in this area was its earnings ratio of 12.00 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.