Safe and Sound

SOUTHWEST 66

ODESSA, TX
3
Star Rating
ODESSA, TX-based SOUTHWEST 66 is an NCUA-insured credit union started in 1949. The credit union holds assets of $85.4 million, according to December 31, 2017, regulatory filings.

Members have $42.3 million on deposit tended by 31 full-time employees. With that footprint, the credit union currently holds loans and leases worth $42.3 million. Its 10,325 members currently have $70.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST 66 exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial stability, capital is useful. When looking at safety and soundness, the more capital, the better.

SOUTHWEST 66 fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 12 out of a possible 30 points.

SOUTHWEST 66 had a capitalization ratio of 12.00 percent in our test, lower than the average for all credit unions, an indication that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these types of assets could eventually be required to use capital to absorb losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, SOUTHWEST 66 scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

SOUTHWEST 66's ratio of troubled assets was 0.00 percent in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, SOUTHWEST 66 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, suggesting that it's outperforming 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.