Safe and Sound

HIGHWAY DISTRICT 2

FORT WORTH, TX
4
Star Rating
HIGHWAY DISTRICT 2 is a FORT WORTH, TX-based, NCUA-insured credit union that opened its doors in 1958. The credit union has assets of $5.9 million, according to December 31, 2017, regulatory filings.

With 2 full-time employees, the credit union currently holds loans and leases worth $2.5 million. Its 820 members currently have $4.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HIGHWAY DISTRICT 2 exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial fortitude. It acts as a bulwark against losses and affords 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 the adequacy of a credit union's capital, HIGHWAY DISTRICT 2 scored 30 out of a possible 30 points, beating out the national average of 15.65.

HIGHWAY DISTRICT 2 appears to be more resilient than its peers, with a capitalization ratio of 30.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets may eventually force a credit union to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, HIGHWAY DISTRICT 2 scored 40 out of a possible 40 points, above the national average of 38.09 points.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

HIGHWAY DISTRICT 2 did below-average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

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, better than 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.