Safe and Sound

CHEMCEL

BISHOP, TX
4
Star Rating
CHEMCEL is a BISHOP, TX-based, NCUA-insured credit union dating back to 1951. The credit union has $111.3 million in assets, according to December 31, 2017, regulatory filings.

Members have $67.6 million on deposit tended by 35 full-time employees. With that footprint, the credit union has amassed loans and leases worth $67.6 million. CHEMCEL's 8,610 members currently have $97.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHEMCEL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial strength. It works as a buffer against losses and affords protection for members when a credit union is experiencing economic trouble. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, CHEMCEL received a score of 12 out of a possible 30 points, falling short of the national average of 15.65.

CHEMCEL's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets may eventually have to use capital to cover losses, decreasing 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, resulting in depressed earnings and potentially more risk of a failure in the future.

CHEMCEL did better than the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 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 affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, CHEMCEL scored 10 out of a possible 30, below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better 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.