Safe and Sound

EMPOWERMENT COMMUNITY DEVELOPMENT

Houston, TX
2
Star Rating
Started in 2006, EMPOWERMENT COMMUNITY DEVELOPMENT is an NCUA-insured credit union headquartered in Houston, TX. The credit union has assets of $1.4 million, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $726,694. Its 792 members currently have $863,286 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, EMPOWERMENT COMMUNITY DEVELOPMENT exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during times of economic instability for the credit union. It follows then that an institution's level of capital is a crucial measurement of its financial strength. When looking at safety and soundness, more capital is better.

EMPOWERMENT COMMUNITY DEVELOPMENT finished below the national average of 15.65 on our test to measure capital adequacy, racking up 4 out of a possible 30 points.

EMPOWERMENT COMMUNITY DEVELOPMENT's capitalization ratio of 4.00 percent in our test was below the average for all credit unions, an indication that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with large numbers of these kinds of assets could eventually be forced to use capital to cover losses, reducing its equity buffer. 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 lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, EMPOWERMENT COMMUNITY DEVELOPMENT scored 28 out of a possible 40 points, failing to reach the national average of 38.09 points.

The credit union's ratio of problem assets was 0.00 percent in our test, less than 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 safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing 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, EMPOWERMENT COMMUNITY DEVELOPMENT scored 12 out of a possible 30, beating the national average of 10.11.

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