Safe and Sound

REED

HOUSTON, TX
4
Star Rating
REED is a HOUSTON, TX-based, NCUA-insured credit union that opened its doors in 1935. Regulatory filings show the credit union having $17.4 million in assets, as of December 31, 2017.

Thanks to the work of 3 full-time employees, the credit union currently holds loans and leases worth $2.3 million. REED's 1,462 members currently have $14.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, REED exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three important criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is key. It works as a buffer against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

REED scored above the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 20 out of a possible 30 points.

REED appears to be more resilient than its peers, with a capitalization ratio of 20.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these kinds of assets could eventually be required to use capital to cover losses, cutting down on its cushion 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.

On Bankrate's asset quality test, REED scored 40 out of a possible 40 points, better than 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

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, likely making the credit union better able to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, REED scored 0 out of a possible 30, falling short of the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above 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.