Safe and Sound

HONOR

Berrien Springs, MI
5
Star Rating
HONOR is an NCUA-insured credit union started in 1934 and currently headquartered in Berrien Springs, MI. As of December 31, 2017, the credit union held assets of $852.6 million.

Thanks to the efforts of 301 full-time employees, the credit union currently holds loans and leases worth $686.4 million. HONOR's 77,421 members currently have $704.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HONOR exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to score American 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 when a credit union is struggling financially. Therefore, an institution's level of capital is an essential measurement of its financial fortitude. When it comes to safety and soundness, the more capital, the better.

HONOR received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

HONOR had a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

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

On Bankrate's asset quality test, HONOR scored 40 out of a possible 40 points, beating out 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 superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

HONOR exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

One sign that HONOR is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.