Safe and Sound

PROMISE

Houston, TX
1
Star Rating
Started in 2008, PROMISE is an NCUA-insured credit union based in Houston, TX. As of December 31, 2017, the credit union held assets of $4.3 million.

Members have $2.5 million on deposit tended by 3 full-time employees. With that footprint, the credit union currently holds loans and leases worth $2.5 million. PROMISE's 2,396 members currently have $2.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PROMISE exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to score U.S. 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 as protection for members during times of economic instability for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is important. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, PROMISE received a score of 4 out of a possible 30 points, falling short of the national average of 15.65.

PROMISE had a capitalization ratio of 4.00 percent in our test, 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 impact of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to cover losses, diminishing 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 money, decreasing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, PROMISE scored 36 out of a possible 40 points, lower than the national average of 38.09 points.

PROMISE'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

How successful a credit union is at making money has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. However, credit unions that are losing money have less ability to do those things.

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

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