Safe and Sound

DIVISION #6 HIGHWAY

Chesterfield, MO
4
Star Rating
Founded in 1953, DIVISION #6 HIGHWAY is an NCUA-insured credit union based in Chesterfield, MO. The credit union has $14.0 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 3 full-time employees, the credit union holds loans and leases worth $7.4 million. DIVISION #6 HIGHWAY's 1,866 members currently have $11.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DIVISION #6 HIGHWAY exhibited a good condition, earning 4 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 grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members during periods of financial instability for the credit union. It follows then that when it comes to measuring an an institution's financial strength, capital is crucial. When it comes to safety and soundness, more capital is better.

DIVISION #6 HIGHWAY beat out the national average of 15.65 points on our test to measure capital adequacy, scoring 24 out of a possible 30 points.

DIVISION #6 HIGHWAY's capitalization ratio of 24.00 percent in our test was above the average for all credit unions, suggesting 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.

A credit union with a large number of these kinds of assets may eventually have to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and increasing the risk of a failure in the future.

DIVISION #6 HIGHWAY scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

DIVISION #6 HIGHWAY's ratio of troubled assets was 0.00 percent in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects 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 more resilient in times of trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, DIVISION #6 HIGHWAY scored 4 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, higher than the average for all credit unions, suggesting that it's beating 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.