Safe and Sound

BEACON COMMUNITY

Louisville, KY
4
Star Rating
BEACON COMMUNITY is a Louisville, KY-based, NCUA-insured credit union founded in 1947. As of December 31, 2017, the credit union held assets of $61.6 million.

Members have $21.9 million on deposit tended by 25 full-time employees. With that footprint, the credit union has amassed loans and leases worth $21.9 million. BEACON COMMUNITY's 11,506 members currently have $53.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BEACON COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a credit union's financial resilience. It works as a bulwark against losses and provides protection for members when a credit union is experiencing economic instability. When looking at safety and soundness, more capital is better.

On our test to measure capital adequacy, BEACON COMMUNITY received a score of 14 out of a possible 30 points, lower than the national average of 15.65.

BEACON COMMUNITY's capitalization ratio of 14.00 percent in our test was less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having a large number of these kinds of assets means a credit union could have to use capital to cover losses, cutting down on 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, resulting in depressed earnings and potentially more risk of a future failure.

BEACON COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

A lower-than-average ratio of problem 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 earnings performance has an effect on its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, BEACON COMMUNITY scored 8 out of a possible 30, less than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's doing better than 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.