Safe and Sound

BEACON

La Porte, TX
3
Star Rating
BEACON is an NCUA-insured credit union founded in 1949 and currently headquartered in La Porte, TX. As of December 31, 2017, the credit union held assets of $165.0 million.

With 54 full-time employees, the credit union holds loans and leases worth $85.5 million. BEACON's 16,854 members currently have $152.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BEACON exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer 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 useful. When looking at safety and soundness, more capital is preferred.

BEACON received a score of 4 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.65.

BEACON appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 4.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

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

Having large numbers of these kinds of assets means a credit union may have to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

BEACON scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was 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 safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's earnings test, BEACON scored 2 out of a possible 30, failing to reach the national average of 10.11.

One indication that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better 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.