Safe and Sound

HORIZON

Kingsport, TN
2
Star Rating
Founded in 1932, HORIZON is an NCUA-insured credit union headquartered in Kingsport, TN. As of December 31, 2017, the credit union held assets of $51.3 million.

Thanks to the work of 29 full-time employees, the credit union has amassed loans and leases worth $40.7 million. HORIZON's 5,787 members currently have $42.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HORIZON 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 important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It works as a bulwark against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

HORIZON received a score of 10 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.

HORIZON 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, lower than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these types of assets may eventually have to use capital to cover losses, shrinking its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a failure in the future.

HORIZON scored 28 out of a possible 40 points on Bankrate's test of asset quality, coming in below the national average of 38.09.

A lower-than-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

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic trouble. Conversely, losses lessen a credit union's ability to do those things.

HORIZON underperformed the average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

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