Safe and Sound

HFS

HILO, HI
4
Star Rating
HFS is a HILO, HI-based, NCUA-insured credit union that opened its doors in 1937. Regulatory filings show the credit union having $541.7 million in assets, as of June 30, 2017.

With 115 full-time employees, the credit union holds loans and leases worth $189.6 million. Its 49,205 members currently have $484.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, HFS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial resilience, capital is valuable. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, HFS received a score of 10 out of a possible 30 points, failing to reach the national average of 15.26.

HFS had a capitalization ratio of 10.00 percent in our test, below the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these kinds of assets could eventually force a credit union to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, decreasing earnings and elevating the chances of a failure in the future.

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

HFS's ratio of troubled assets was 5.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

HFS received above-average marks on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

One sign that HFS is running ahead of its peers in this area was its earnings ratio of 7.00 percent in our test, higher 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.