Safe and Sound

HEREFORD TEXAS

Hereford, TX
5
Star Rating
Started in 1936, HEREFORD TEXAS is an NCUA-insured credit union based in Hereford, TX. The credit union has $50.3 million in assets, according to December 31, 2017, regulatory filings.

Members have $34.2 million on deposit tended by 22 full-time employees. With that footprint, the credit union currently holds loans and leases worth $34.2 million. HEREFORD TEXAS's 7,911 members currently have $37.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEREFORD TEXAS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial strength. It acts as a bulwark against losses and provides protection for members during periods of financial instability for the credit union. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, HEREFORD TEXAS scored 30 out of a possible 30 points, better than the national average of 15.65.

HEREFORD TEXAS appears to be stronger than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

This test's purpose is 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 loans.

A credit union with large numbers of these types of assets may eventually be required to use capital to cover losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

HEREFORD TEXAS exceeded the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem 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 profitability affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand economic trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

HEREFORD TEXAS received above-average marks on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

HEREFORD TEXAS had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.