Safe and Sound

JAFARI NO-INTEREST

HOUSTON, TX
5
Star Rating
JAFARI NO-INTEREST is an NCUA-insured credit union founded in 2016 and currently based in HOUSTON, TX. Regulatory filings show the credit union having assets of $819,050, as of December 31, 2017.

The credit union has amassed loans and leases worth $273,654. Its 268 members currently have $576,767 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, JAFARI NO-INTEREST exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to grade American 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 buffer against losses and affords protection for members when a credit union is experiencing financial trouble. It follows then that when it comes to measuring an a credit union's financial stability, capital is valuable. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, JAFARI NO-INTEREST racked up 30 out of a possible 30 points, exceeding the national average of 15.65.

JAFARI NO-INTEREST's capitalization ratio of 30.00 percent in our test was better than the average for all credit unions, an indication that it's stronger than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid loans.

Having lots of these types of assets could eventually require a credit union to use capital to absorb losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, decreasing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, JAFARI NO-INTEREST scored 40 out of a possible 40 points, above the national average of 38.09 points.

Earnings score

A credit union's profitability has an effect on its safety and soundness. Earnings may be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

JAFARI NO-INTEREST received above-average marks on Bankrate's earnings test, achieving a score of 28 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication 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.