Safe and Sound

VALLEY HILLS

SAN BERNARDINO, CA
5
Star Rating
VALLEY HILLS is a SAN BERNARDINO, CA-based, NCUA-insured credit union founded in 1967. As of December 31, 2017, the credit union had assets of $3.4 million.

The credit union currently holds loans and leases worth $2.0 million. Its 432 members currently have $2.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, VALLEY HILLS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members during times of economic instability for the credit union. Therefore, a credit union's level of capital is a useful measurement of its financial resilience. From a safety and soundness perspective, the higher the capital, the better.

VALLEY HILLS racked up 18 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, exceeding the national average of 15.65.

VALLEY HILLS's capitalization ratio of 18.00 percent in our test was above the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate 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.

Having large numbers of these kinds of assets suggests a credit union may eventually have to use capital to absorb losses, shrinking 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 interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

VALLEY HILLS scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand financial trouble. Credit unions that are losing money, however, have less ability to do those things.

VALLEY HILLS scored 16 out of a possible 30 on Bankrate's earnings test, above the national average of 10.11.

One indication that the credit union is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.