Safe and Sound

HONEA

Fort Shafter, HI
2
Star Rating
Founded in 1952, HONEA is an NCUA-insured credit union headquartered in Fort Shafter, HI. The credit union has $22.2 million in assets, according to June 30, 2017, regulatory filings.

Members have $8.6 million on deposit tended by 3 full-time employees. With that footprint, the credit union currently holds loans and leases worth $8.6 million. HONEA's 887 members currently have $19.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, HONEA exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during times of financial instability for the credit union. Therefore, when it comes to measuring an an institution's financial strength, capital is crucial. From a safety and soundness perspective, the more capital, the better.

HONEA fell below the national average of 15.26 on our test to measure the adequacy of a credit union's capital, racking up 12 out of a possible 30 points.

HONEA appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 11.00 percent in our test, below the average for all credit unions.

Asset Quality Score

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

Having a large number of these kinds of assets could eventually force a credit union to use capital to absorb losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a future failure.

HONEA finished below the national average of 38.15 on Bankrate's test of asset quality, racking up 32 out of a possible 40 points .

An above-average ratio of problem assets of 17.00 percent in our test was something to watch for the credit union.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. 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 better able to withstand financial trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's earnings test, HONEA scored 0 out of a possible 30, less than the national average of 10.31.

One indication that HONEA is performing behind its peers in this area was its earnings ratio of -5.00 percent in our test, below 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.