Safe and Sound

M E C O

HONDO, TX
5
Star Rating
HONDO, TX-based M E C O is an NCUA-insured credit union founded in 1960. The credit union has $5.6 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 3 full-time employees, the credit union currently holds loans and leases worth $2.7 million. Its 923 members currently have $4.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, M E C O exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is valuable. It works as a cushion against losses and as protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, more capital is better.

M E C O racked up 26 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, better than the national average of 15.65.

M E C O appears to be more resilient than its peers, with a capitalization ratio of 26.00 percent in our test, above the average for all credit unions.

Asset Quality Score

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

Having lots of these types of assets may eventually require a credit union to use capital to absorb losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, pushing down earnings and increasing the risk of a failure in the future.

M E C O scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.

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

Earnings score

A credit union's earnings performance affects its safety and soundness. Earnings may 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 better able to withstand economic shocks. Losses, on the other hand, diminish a credit union's ability to do those things.

M E C O underperformed the average on Bankrate's earnings test, achieving a score of 4 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's doing better than 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.