WHAT IS
SAFE AND SOUND?
When it comes to measuring a credit union's financial strength, capital is crucial. It acts as a buffer against losses and affords protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, more capital is preferred.
HORIZONS received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, lower than the national average of 15.65.
HORIZONS's capitalization ratio of 14.00 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.
In this test, Bankrate tries to estimate the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.
A credit union with extensive holdings of these kinds of assets could eventually be required to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and increasing the chances of a failure in the future.
HORIZONS scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.
A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.
HORIZONS scored 4 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 10.11.
One sign that HORIZONS is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.
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.