Overview of Southern FCU

Southern FCU has been operating for 68 years, having first been established in the year 1954. The credit union mainly focuses on the provision of auto loans which represent 68% of its loans outstanding. In terms of its overall asset base, Southern FCU is larger than 62% of credit unions in the country. Unlike banks, credit unions like Southern FCU are not insured by the Federal Deposit Insurance Corporation (FDIC) but instead receive deposit insurance from the National Credit Union Administration (NCUA), which operates in a similar fashion to the FDIC. The company has a total of 1 branch and employs a total of 8 employees.

Who Can Join?

Membership is open to Transocean employees, Transocean retirees and family members of employees.

Details on the Credit Union’s Balance Sheet

The credit union currently has total assets of $88 million, total deposits of $56 million and net loans outstanding of $34 million. On average its members had a total of $15,340 deposited with the credit union – this is a helpful metric to monitor as it provides us with an idea of the level of engagement of the credit union’s membership base. The credit union also has a loan to deposit ratio of 61% which is higher than the average credit union of similar size. The loan to deposit ratio is a good way to assess how liquid a bank or credit union’s balance sheet is. Lastly, Southern FCU’s loan portfolio mainly consists of auto loans and credit card loans which represent 68% and 4% of its loan book and had outstanding balances of $23 million and $1 million, respectively.

Contact and Other Helpful Information

  • Main Office Address: P.O. Box 2765, Houston, TX 77252-2765
  • Website: http://www.southernfederalcu.org
  • Phone: (713) 232-7774
  • Charter Number: 9214
  • Charter Year: 1954
  • Employees: 8
  • Routing Number: 313084632
  • Membership: Credit unions in the state of Texas have an average membership base of 22,703 compared with Southern FCU which has total members of 3,618. Over the past three years, the credit union’s total base of members has declined by 13%.

Southern FCU: Financial Overview

southern fcu-balance-sheet-metrics

Detailed above is a chart showing the progression of four important balance sheet items over the past year for Southern FCU. Assets and total loans for the credit union have fallen by 1.9% and decreased by 16.4%, respectively. In addition, the company’s auto loans, which as noted earlier is the largest portion of the loan book, has decreased by 14.7%. Lastly, the credit union’s deposits have expanded by 2.6%. ‘Net worth’ is a good way to assess the long-term performance of a credit union as it represents the accumulated value of the entity over time. Importantly this is value that accrues to the credit union’s owners: its members. Southern FCU has a total net worth of $32 million. This implies that the credit union has a net worth per member of $8,768 which is greater than the national average of $1,606.

Overview of the Credit Union’s Performance Metrics

southern fcu-selected-performance-metrics

In the above chart we have displayed three statistics that are important in evaluating a credit union’s performance and shown how Southern FCU compares on these metrics, in addition to detailing how the credit union performed on each metric in the prior year. Starting with the company’s return on assets, on this metric Southern FCU is below the average credit union in its peer set and over the past year ROA has declined with a total change of 0.49%. Return on assets tells us how productive a company is being with its asset base. Moving on to the credit union’s delinquency rate, which tells us how much of a credit union’s loan book is delinquent, the credit union is well above its peer group on this metric and compared with the prior year it has improved substantially. Keep in mind that a higher delinquency rate indicates a lower performing loan book so a declining rate is a favorable trend. Finally, the net worth ratio for the credit union is 36.1% which is well above its peer group average of 10.2%. This metric has improved substantially on a year over year basis and stood at 35.2% a year ago. Based on the NCUA guidelines, the credit union is considered to be well capitalized.

Conclusion

Ultimately, after considering all of the relevant factors we rate Southern FCU 2.9 out of 5.0, which is above average. As a final note, please remember that our rating is the product of a proprietary scoring methodology which uses nationwide data for credit unions and our survey work. Importantly, none of the work presented herein is intended to be investment advice or advice of any sort and is presented purely for informational purposes.