Safe and Sound

HOMETOWN

KULM, ND
5
Star Rating
Started in 1949, HOMETOWN is an NCUA-insured credit union headquartered in KULM, ND. As of December 31, 2017, the credit union had assets of $112.5 million.

With 22 full-time employees, the credit union has amassed loans and leases worth $100.6 million. Its 3,004 members currently have $87.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HOMETOWN exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. It follows then that a credit union's level of capital is a key measurement of its financial fortitude. When looking at safety and soundness, the higher the capital, the better.

HOMETOWN exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 20 out of a possible 30 points.

HOMETOWN had a capitalization ratio of 20.00 percent in our test, above the average for all credit unions, an indication that it's on more solid financial footing than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due mortgages.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to cover losses, reducing its cushion of equity. 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 depressed earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of HOMETOWN's total assets in our test, less than the national average and 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 can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, HOMETOWN scored 20 out of a possible 30, beating the national average of 10.11.

HOMETOWN had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's doing better than 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.