Safe and Sound

HURON AREA EDUCATION

HURON, SD
3
Star Rating
HURON, SD-based HURON AREA EDUCATION is an NCUA-insured credit union started in 1952. As of December 31, 2017, the credit union held assets of $13.2 million.

With 3 full-time employees, the credit union holds loans and leases worth $7.9 million. HURON AREA EDUCATION's 942 members currently have $12.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HURON AREA EDUCATION exhibited a generally satisfactory condition, earning 3 out of 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 American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial fortitude. It acts as a buffer against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.

HURON AREA EDUCATION received a score of 6 out of a possible 30 points on our test to measure capital adequacy, falling short of the national average of 15.65.

HURON AREA EDUCATION's capitalization ratio of 6.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

Having lots of these kinds of assets may eventually require a credit union to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and increasing the risk of a future failure.

On Bankrate's test of asset quality, HURON AREA EDUCATION scored 36 out of a possible 40 points, below the national average of 38.09 points.

HURON AREA EDUCATION's ratio of problem assets was 0.00 percent in our test, below 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. Earnings can be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

HURON AREA EDUCATION beat the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One sign that the credit union is doing better than 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.