Safe and Sound

GARDEN ISLAND

Lihue, HI
4
Star Rating
Lihue, HI-based GARDEN ISLAND is an NCUA-insured credit union founded in 1938. As of December 31, 2017, the credit union had assets of $95.7 million.

Thanks to the work of 16 full-time employees, the credit union holds loans and leases worth $22.5 million. GARDEN ISLAND's 7,573 members currently have $81.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, GARDEN ISLAND exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. Therefore, a credit union's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, GARDEN ISLAND scored 20 out of a possible 30 points, beating out the national average of 15.65.

GARDEN ISLAND appears to be more resilient than its peers, with a capitalization ratio of 20.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

A credit union with lots of these types of assets may eventually be required to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

GARDEN ISLAND beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

GARDEN ISLAND scored 4 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting 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.