Safe and Sound

CLASS ACT

LOUISVILLE, KY
4
Star Rating
LOUISVILLE, KY-based CLASS ACT is an NCUA-insured credit union founded in 1954. Regulatory filings show the credit union having $207.5 million in assets, as of June 30, 2017.

Thanks to the efforts of 54 full-time employees, the credit union has amassed loans and leases worth $110.9 million. CLASS ACT's 18,981 members currently have $187.4 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, CLASS ACT exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during periods of financial trouble for the credit union. Therefore, when it comes to measuring an an institution's financial resilience, capital is valuable. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, CLASS ACT received a score of 8 out of a possible 30 points, falling short of the national average of 15.26.

CLASS ACT had a capitalization ratio of 9.00 percent in our test, worse than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as past-due mortgages, 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 kinds of assets could eventually have to use capital to cover losses, decreasing its cushion 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, resulting in lower earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, CLASS ACT scored 40 out of a possible 40 points, better than the national average of 38.15 points.

The credit union's ratio of troubled assets was 5.00 percent in our test, less than 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 has an effect on its long-term survivability. Earnings can be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

CLASS ACT scored 14 out of a possible 30 on Bankrate's earnings test, above the national average of 10.31.

CLASS ACT had an earnings ratio of 7.00 percent in our test, higher than the average for all credit unions, suggesting 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.