WHAT IS
SAFE AND SOUND?
When it comes to measuring an institution's financial stability, capital is useful. It acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.
GULF WINDS came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 14 out of a possible 30 points.
GULF WINDS had a capitalization ratio of 14.00 percent in our test, worse than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.
In this test, Bankrate tries to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.
A credit union with extensive holdings of these types of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.
On Bankrate's test of asset quality, GULF WINDS scored 40 out of a possible 40 points, exceeding the national average of 38.09 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.
A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing 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.
GULF WINDS scored 12 out of a possible 30 on Bankrate's test of earnings, beating out the national average of 10.11.
The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting 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.