Safe and Sound

HEALTHCARE 1ST

CUMBERLAND, MD
1
Star Rating
HEALTHCARE 1ST is a CUMBERLAND, MD-based, NCUA-insured credit union dating back to 1960. As of December 31, 2017, the credit union had assets of $8.3 million.

With 4 full-time employees, the credit union currently holds loans and leases worth $3.6 million. Its 1,344 members currently have $7.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEALTHCARE 1ST exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members during times of economic trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial strength, capital is valuable. From a safety and soundness perspective, the more capital, the better.

HEALTHCARE 1ST finished below the national average of 15.65 on our test to measure capital adequacy, racking up 4 out of a possible 30 points.

HEALTHCARE 1ST appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 4.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

Having a large number of these types of assets suggests a credit union could eventually have to use capital to cover losses, decreasing 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, decreasing earnings and increasing the chances of a failure in the future.

HEALTHCARE 1ST scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. Earnings may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, HEALTHCARE 1ST scored 0 out of a possible 30, lower than the national average of 10.11.

One indication that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above the average for all credit unions.

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.