Safe and Sound

CU HAWAII

Hilo, HI
4
Star Rating
CU HAWAII is a Hilo, HI-based, NCUA-insured credit union founded in 1955. As of June 30, 2017, the credit union had assets of $275.9 million.

With 81 full-time employees, the credit union holds loans and leases worth $134.1 million. Its 27,655 members currently have $238.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, CU HAWAII exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial fortitude. It works as a bulwark against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, CU HAWAII received a score of 14 out of a possible 30 points, falling short of the national average of 15.26.

CU HAWAII appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, below the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

Having a large number of these types of assets means a credit union could eventually have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and increasing the risk of a failure in the future.

On Bankrate's test of asset quality, CU HAWAII scored 40 out of a possible 40 points, beating the national average of 38.15 points.

Troubled assets made up 1.00 percent of CU HAWAII's total assets in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, CU HAWAII scored 6 out of a possible 30, less than the national average of 10.31.

One sign that CU HAWAII is running ahead of its peers in this area was its earnings ratio of 2.00 percent in our test, better than 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.