Safe and Sound

LA JOYA AREA

La Joya, TX
1
Star Rating
LA JOYA AREA is a La Joya, TX-based, NCUA-insured credit union that opened its doors in 1961. As of December 31, 2017, the credit union held assets of $48.6 million.

With 30 full-time employees, the credit union holds loans and leases worth $30.7 million. Its 16,385 members currently have $43.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LA JOYA AREA exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial fortitude. It acts as a buffer against losses and affords protection for members during times of financial instability for the credit union. When it comes to safety and soundness, the more capital, the better.

LA JOYA AREA finished below the national average of 15.65 on our test to measure capital adequacy, scoring 12 out of a possible 30 points.

LA JOYA AREA had a capitalization ratio of 12.00 percent in our test, below the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due loans.

A credit union with a large number of these types of assets may eventually have to use capital to absorb losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are 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, LA JOYA AREA scored 32 out of a possible 40 points, below the national average of 38.09 points.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses reduce a credit union's ability to do those things.

LA JOYA AREA fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One sign that LA JOYA AREA is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.