Safe and Sound

FIRST COMMUNITY

Houston, TX
4
Star Rating
Founded in 1954, FIRST COMMUNITY is an NCUA-insured credit union headquartered in Houston, TX. As of December 31, 2017, the credit union held assets of $1.36 billion.

Thanks to the work of 273 full-time employees, the credit union currently holds loans and leases worth $1.06 billion. FIRST COMMUNITY's 125,229 members currently have $1.20 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did 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 a valuable measurement of an institution's financial resilience. It works as a buffer against losses and as protection for members when a credit union is experiencing financial instability. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, FIRST COMMUNITY received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

FIRST COMMUNITY appears to be weaker than its peers in this area, with a capitalization ratio of 8.00 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 past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these types of assets may eventually be forced to use capital to cover losses, shrinking its equity buffer. 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, pushing down earnings and increasing the chances of a future failure.

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

FIRST COMMUNITY's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union better able to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

FIRST COMMUNITY scored 20 out of a possible 30 on Bankrate's earnings test, beating out the national average of 10.11.

FIRST COMMUNITY had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting 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.