Safe and Sound

KAUAI COMMUNITY

Lihue, HI
4
Star Rating
KAUAI COMMUNITY is an NCUA-insured credit union started in 1954 and currently based in Lihue, HI. Regulatory filings show the credit union having assets of $473.8 million, as of June 30, 2017.

With 84 full-time employees, the credit union holds loans and leases worth $248.0 million. Its 34,032 members currently have $424.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, KAUAI COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is valuable. It acts as a buffer against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is better.

KAUAI COMMUNITY finished below the national average of 15.26 on our test to measure capital adequacy, receiving a score of 10 out of a possible 30 points.

KAUAI COMMUNITY's capitalization ratio of 9.00 percent in our test was less than the average for all credit unions, a sign that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid loans.

Having large numbers of these types of assets may eventually require a credit union to use capital to cover losses, diminishing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

KAUAI COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.15.

A lower-than-average ratio of problem assets of 6.00 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. A credit union can retain its earnings, expanding its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, are less able to do those things.

KAUAI COMMUNITY did above-average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

The credit union had an earnings ratio of 8.00 percent in our test, higher than the average for all credit unions, a sign that it's beating 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.