Safe and Sound

HUD

WASHINGTON, DC
3
Star Rating
Started in 1940, HUD is an NCUA-insured credit union based in WASHINGTON, DC. As of December 31, 2017, the credit union had assets of $45.3 million.

With 12 full-time employees, the credit union has amassed loans and leases worth $19.9 million. HUD's 4,975 members currently have $41.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HUD exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is an essential measurement of its financial fortitude. When it comes to safety and soundness, more capital is better.

HUD fell below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

HUD had a capitalization ratio of 8.00 percent in our test, below the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these types of assets may eventually force a credit union to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, beneath the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, HUD scored 0 out of a possible 30, lower than the national average of 10.11.

One sign that the credit union is beating 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.