Safe and Sound

GARDEN ISLAND

Lihue, HI
4
Star Rating
GARDEN ISLAND is a Lihue, HI-based, NCUA-insured credit union that opened its doors in 1938. Regulatory filings show the credit union having assets of $94.6 million, as of June 30, 2017.

Members have $21.6 million on deposit tended by 16 full-time employees. With that footprint, the credit union currently holds loans and leases worth $21.6 million. GARDEN ISLAND's 7,888 members currently have $80.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, GARDEN ISLAND exhibited a good condition, earning 4 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 American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members during periods of economic trouble for the credit union. It follows then that an institution's level of capital is an important measurement of its financial strength. From a safety and soundness perspective, the more capital, the better.

GARDEN ISLAND racked up 20 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.26.

GARDEN ISLAND appears to be on more solid financial footing than its peers, with a capitalization ratio of 15.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

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

A credit union with extensive holdings of these kinds of assets could eventually be forced to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in reduced earnings and potentially more risk of a failure in the future.

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

A below-average ratio of problem assets of 3.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses reduce a credit union's ability to do those things.

GARDEN ISLAND scored 4 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.31.

One indication that GARDEN ISLAND is doing better than 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.