Safe and Sound

ESTACADO

HOBBS, NM
4
Star Rating
HOBBS, NM-based ESTACADO is an NCUA-insured credit union started in 1953. Regulatory filings show the credit union having $59.2 million in assets, as of December 31, 2017.

Thanks to the efforts of 19 full-time employees, the credit union has amassed loans and leases worth $34.0 million. Its 7,188 members currently have $51.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ESTACADO exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial resilience. It works as a buffer against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is better.

ESTACADO fell below the national average of 15.65 on our test to measure capital adequacy, racking up 12 out of a possible 30 points.

ESTACADO's capitalization ratio of 12.00 percent in our test was worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

A credit union with a large number of these kinds of assets could eventually be required to use capital to absorb losses, decreasing its equity cushion. 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 elevating the chances of a future failure.

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

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, ESTACADO scored 10 out of a possible 30, less than 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, an indication 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.