Safe and Sound

HIGHWAY DISTRICT 9

WACO, TX
5
Star Rating
WACO, TX-based HIGHWAY DISTRICT 9 is an NCUA-insured credit union founded in 1953. As of December 31, 2017, the credit union had assets of $4.7 million.

Thanks to the work of 2 full-time employees, the credit union holds loans and leases worth $1.5 million. Its 752 members currently have $3.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HIGHWAY DISTRICT 9 exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during times of financial trouble for the credit union. Therefore, when it comes to measuring an an institution's financial resilience, capital is key. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, HIGHWAY DISTRICT 9 scored 30 out of a possible 30 points, better than the national average of 15.65.

HIGHWAY DISTRICT 9 appears to be stronger than its peers, with a capitalization ratio of 30.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these kinds of assets could eventually be required to use capital to absorb losses, shrinking 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 money, reducing earnings and elevating the chances of a failure in the future.

HIGHWAY DISTRICT 9 scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.

Troubled assets made up 0.00 percent of HIGHWAY DISTRICT 9's total assets 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 making money affects its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses reduce a credit union's ability to do those things.

HIGHWAY DISTRICT 9 scored 6 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 10.11.

HIGHWAY DISTRICT 9 had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's running ahead of 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.