Safe and Sound

HEALTH

Birmingham, AL
5
Star Rating
Birmingham, AL-based HEALTH is an NCUA-insured credit union founded in 1955. The credit union has $19.6 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the work of 5 full-time employees, the credit union currently holds loans and leases worth $7.5 million. Its 1,841 members currently have $15.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEALTH exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members during times of financial trouble for the credit union. It follows then that a credit union's level of capital is a crucial measurement of its financial strength. When looking at safety and soundness, more capital is better.

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

HEALTH had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, suggesting that it's on more solid financial footing than its peers.

Asset Quality Score

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

A credit union with extensive holdings of these kinds of assets may eventually be forced to use capital to cover losses, cutting down on 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 interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, HEALTH scored 40 out of a possible 40 points, better than the national average of 38.09 points.

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

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

HEALTH fell short of the national average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

One sign that HEALTH is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.