Safe and Sound

M E C O

HONDO, TX
5
Star Rating
M E C O is a HONDO, TX-based, NCUA-insured credit union that opened its doors in 1960. As of June 30, 2017, the credit union held assets of $5.6 million.

The credit union holds loans and leases worth $2.7 million. Its 922 members currently have $4.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, M E C O exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired 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 buffer against losses and provides 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 resilience, capital is valuable. When looking at safety and soundness, the more capital, the better.

M E C O achieved a score of 24 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.26.

M E C O's capitalization ratio of 17.00 percent in our test was better than the average for all credit unions, a sign that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these types of assets means a credit union may have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

M E C O scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.15.

M E C O's ratio of troubled assets was 1.00 percent in our test, below the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union better able to withstand financial trouble. Obviously, credit unions that are losing money are less able to do those things.

M E C O fell short of the national average on Bankrate's test of earnings, achieving a score of 6 out of a possible 30.

M E C O had an earnings ratio of 2.00 percent in our test, higher than the average for all credit unions, a sign that it's doing better than 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.