Safe and Sound

VALLEY ISLE COMMUNITY

Kahului, HI
4
Star Rating
Kahului, HI-based VALLEY ISLE COMMUNITY is an NCUA-insured credit union founded in 1940. As of December 31, 2017, the credit union held assets of $115.3 million.

Members have $47.2 million on deposit tended by 22 full-time employees. With that footprint, the credit union holds loans and leases worth $47.2 million. VALLEY ISLE COMMUNITY's 13,441 members currently have $102.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, VALLEY ISLE COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial strength, capital is important. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, VALLEY ISLE COMMUNITY received a score of 12 out of a possible 30 points, falling short of the national average of 15.65.

VALLEY ISLE COMMUNITY's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

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

A credit union with a large number of these types of assets may eventually be required to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the risk of a future failure.

VALLEY ISLE COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding 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 profitability affects its safety and soundness. Earnings can be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Conversely, losses reduce a credit union's ability to do those things.

VALLEY ISLE COMMUNITY fell short of the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.