Safe and Sound

BROWN-FORMAN EMPLOYEES

LOUISVILLE, KY
4
Star Rating
LOUISVILLE, KY-based BROWN-FORMAN EMPLOYEES is an NCUA-insured credit union founded in 1936. As of December 31, 2017, the credit union had assets of $12.3 million.

Thanks to the efforts of 3 full-time employees, the credit union currently holds loans and leases worth $6.6 million. Its 1,390 members currently have $10.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BROWN-FORMAN EMPLOYEES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is useful. It works as a bulwark against losses and as protection for members when a credit union is experiencing financial instability. When it comes to safety and soundness, more capital is better.

On our test to measure capital adequacy, BROWN-FORMAN EMPLOYEES racked up 16 out of a possible 30 points, beating out the national average of 15.65.

BROWN-FORMAN EMPLOYEES's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

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

A credit union with a large number of these types of assets could eventually be required to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the risk of a future failure.

BROWN-FORMAN EMPLOYEES scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out 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

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, BROWN-FORMAN EMPLOYEES scored 6 out of a possible 30, coming in below the national average of 10.11.

BROWN-FORMAN EMPLOYEES had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting 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.