Safe and Sound

FINANCIAL HEALTH

Indianapolis, IN
2
Star Rating
FINANCIAL HEALTH is an NCUA-insured credit union founded in 1971 and currently based in Indianapolis, IN. As of December 31, 2017, the credit union had assets of $32.7 million.

With 23 full-time employees, the credit union has amassed loans and leases worth $16.2 million. FINANCIAL HEALTH's 8,894 members currently have $28.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FINANCIAL HEALTH 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 faired on the three major criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during periods of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is crucial. From a safety and soundness perspective, the more capital, the better.

FINANCIAL HEALTH received a score of 12 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 15.65.

FINANCIAL HEALTH had a capitalization ratio of 12.00 percent in our test, below the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

Having lots of these types of assets may eventually force a credit union 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 no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

FINANCIAL HEALTH fell short of the national average of 38.09 on Bankrate's asset quality test, racking up 32 out of a possible 40 points .

Troubled assets made up 0.00 percent of the credit union's total assets in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings may 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 more resilient in times of trouble. Conversely, losses reduce a credit union's ability to do those things.

On Bankrate's earnings test, FINANCIAL HEALTH scored 0 out of a possible 30, less than the national average of 10.11.

FINANCIAL HEALTH had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's beating its peers in this area.

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.