Safe and Sound

HUGHES

TUCSON, AZ
5
Star Rating
TUCSON, AZ-based HUGHES is an NCUA-insured credit union founded in 1951. The credit union holds $1.12 billion in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 228 full-time employees, the credit union currently holds loans and leases worth $915.6 million. HUGHES's 116,656 members currently have $994.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HUGHES exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to score 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 cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is a useful measurement of its financial resilience. When it comes to safety and soundness, more capital is better.

HUGHES received a score of 10 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 15.65.

HUGHES's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

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

Having extensive holdings of these kinds of assets could eventually force a credit union to use capital to absorb losses, diminishing its equity cushion. 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 lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, HUGHES scored 40 out of a possible 40 points, beating the national average of 38.09 points.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, take away from a credit union's ability to do those things.

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

The credit union had an earnings ratio of 0.00 percent in our test, better than 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.