Safe and Sound

KEKAHA

Kekaha, HI
5
Star Rating
Kekaha, HI-based KEKAHA is an NCUA-insured credit union founded in 1938. Regulatory filings show the credit union having assets of $20.6 million, as of June 30, 2017.

With 3 full-time employees, the credit union currently holds loans and leases worth $12.0 million. Its 1,752 members currently have $15.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, KEKAHA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

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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 essential. It works as a bulwark against losses and provides protection for members during times of financial instability for the credit union. When looking at safety and soundness, the more capital, the better.

KEKAHA racked up 30 out of a possible 30 points on our test to measure capital adequacy, beating out the national average of 15.26.

KEKAHA appears to be more resilient than its peers, with a capitalization ratio of 21.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets could eventually have to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

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

A lower-than-average ratio of troubled assets of 6.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

KEKAHA underperformed the average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

KEKAHA had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's right in line with 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.