WHAT IS
SAFE AND SOUND?
Capital acts as a bulwark against losses and provides protection for members during times of financial trouble for the credit union. It follows then that a credit union's level of capital is an important measurement of its financial fortitude. When looking at safety and soundness, more capital is better.
CARBONDALE HIGHWAY exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 22 out of a possible 30 points.
CARBONDALE HIGHWAY's capitalization ratio of 22.00 percent in our test was higher than the average for all credit unions, an indication that it's on more solid financial footing than its peers.
Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
Having extensive holdings of these types of assets suggests a credit union may have to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and increasing the risk of a failure in the future.
CARBONDALE HIGHWAY scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.
How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.
On Bankrate's earnings test, CARBONDALE HIGHWAY scored 2 out of a possible 30, less than the national average of 10.11.
CARBONDALE HIGHWAY had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign that it's beating its peers in this area.
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.
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.