Safe and Sound

MEMBERS FINANCIAL

MIDLAND, TX
1
Star Rating
MIDLAND, TX-based MEMBERS FINANCIAL is an NCUA-insured credit union started in 1940. The credit union has $36.8 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 16 full-time employees, the credit union currently holds loans and leases worth $28.3 million. MEMBERS FINANCIAL's 5,158 members currently have $34.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MEMBERS FINANCIAL 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 important criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial stability, capital is useful. When it comes to safety and soundness, more capital is preferred.

MEMBERS FINANCIAL scored below the national average of 15.65 on our test to measure capital adequacy, scoring 4 out of a possible 30 points.

MEMBERS FINANCIAL's capitalization ratio of 4.00 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 estimate the effect of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these kinds of assets could eventually be forced to use capital to absorb losses, reducing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

MEMBERS FINANCIAL scored 36 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 38.09.

MEMBERS FINANCIAL's ratio of troubled assets was 0.00 percent in our test, beneath the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

MEMBERS FINANCIAL did below-average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One indication that the credit union is running ahead of 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.