Safe and Sound

SOUTHWEST

Albuquerque, NM
2
Star Rating
SOUTHWEST is an Albuquerque, NM-based, NCUA-insured credit union dating back to 1936. The credit union has $61.2 million in assets, according to December 31, 2017, regulatory filings.

With 20 full-time employees, the credit union has amassed loans and leases worth $33.0 million. SOUTHWEST's 5,049 members currently have $53.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is experiencing financial trouble. It follows then that a credit union's level of capital is an important measurement of its financial strength. When it comes to safety and soundness, more capital is better.

SOUTHWEST fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 6 out of a possible 30 points.

SOUTHWEST appears to be weaker than its peers in this area, with a capitalization ratio of 6.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

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

Having large numbers of these types of assets could eventually force a credit union to use capital to cover losses, cutting down on its equity buffer. 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 future failure.

On Bankrate's asset quality test, SOUTHWEST scored 32 out of a possible 40 points, falling short of the national average of 38.09 points.

Troubled assets made up 0.00 percent of SOUTHWEST's total assets in our test, less than 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 safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, SOUTHWEST scored 2 out of a possible 30, less than the national average of 10.11.

SOUTHWEST had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign that it's running ahead of 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.