Safe and Sound

HILCO

Kerrville, TX
2
Star Rating
HILCO is an NCUA-insured credit union founded in 1960 and currently headquartered in Kerrville, TX. Regulatory filings show the credit union having assets of $7.3 million, as of December 31, 2017.

Members have $3.9 million on deposit tended by 5 full-time employees. With that footprint, the credit union currently holds loans and leases worth $3.9 million. Its 1,033 members currently have $6.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HILCO exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at 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 works as a cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is essential. From a safety and soundness perspective, the higher the capital, the better.

HILCO fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 2 out of a possible 30 points.

HILCO's capitalization ratio of 2.00 percent in our test was less than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

A credit union with a large number of these kinds of assets may eventually have to use capital to cover losses, diminishing its cushion of equity. 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, reducing earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, HILCO scored 28 out of a possible 40 points, falling short of the national average of 38.09 points.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, likely making the credit union better able to withstand financial trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, HILCO scored 0 out of a possible 30, below the national average of 10.11.

HILCO had an earnings ratio of 0.00 percent in our test, above 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.