Safe and Sound

HONEA

Fort Shafter, HI
2
Star Rating
Fort Shafter, HI-based HONEA is an NCUA-insured credit union founded in 1952. The credit union holds $21.8 million in assets, according to December 31, 2017, regulatory filings.

Members have $8.6 million on deposit tended by 4 full-time employees. With that footprint, the credit union has amassed loans and leases worth $8.6 million. Its 852 members currently have $19.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HONEA exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is experiencing economic trouble. It follows then that a credit union's level of capital is a useful measurement of its financial fortitude. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, HONEA received a score of 12 out of a possible 30 points, less than the national average of 15.65.

HONEA's capitalization ratio of 12.00 percent in our test was less than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due loans.

A credit union with large numbers of these kinds of assets may eventually be required to use capital to cover losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

HONEA finished below the national average of 38.09 on Bankrate's asset quality test, racking up 32 out of a possible 40 points .

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

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

HONEA scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's outperforming 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.