Safe and Sound

HOMEWOOD

homewood, IL
2
Star Rating
homewood, IL-based HOMEWOOD is an NCUA-insured credit union started in 1937. As of December 31, 2017, the credit union held assets of $2.9 million.

HOMEWOOD's 892 members currently have $2.6 million in shares with the credit union. With that footprint, the credit union currently holds loans and leases worth $1.1 million.

Overall, Bankrate believes that, as of December 31, 2017, HOMEWOOD exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial fortitude. It acts as a bulwark against losses and provides protection for members when a credit union is experiencing financial trouble. When it comes to safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, HOMEWOOD received a score of 10 out of a possible 30 points, less than the national average of 15.65.

HOMEWOOD appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

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

A credit union with a large number of these types of assets may eventually have to use capital to cover losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and elevating the chances of a failure in the future.

HOMEWOOD scored 24 out of a possible 40 points on Bankrate's asset quality test, falling short of the national average of 38.09.

HOMEWOOD's ratio of problem assets was 0.00 percent in our test, lower than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's test of earnings, HOMEWOOD scored 4 out of a possible 30, below the national average of 10.11.

One indication that the credit union 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.