Safe and Sound

CHEMCO

LOUISVILLE, KY
2
Star Rating
LOUISVILLE, KY-based CHEMCO is an NCUA-insured credit union started in 1967. Regulatory filings show the credit union having $18.8 million in assets, as of December 31, 2017.

Thanks to the efforts of 8 full-time employees, the credit union currently holds loans and leases worth $11.6 million. Its 2,462 members currently have $17.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CHEMCO exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is a crucial measurement of its financial fortitude. From a safety and soundness perspective, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, CHEMCO received a score of 8 out of a possible 30 points, falling short of the national average of 15.65.

CHEMCO had a capitalization ratio of 8.00 percent in our test, below the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact 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 a large number of these kinds of assets may eventually have to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

CHEMCO scored 32 out of a possible 40 points on Bankrate's test of asset quality, lower than the national average of 38.09.

The credit union's ratio of problem assets was 0.00 percent in our test, below 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 affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in tough times. Conversely, losses take away from a credit union's ability to do those things.

CHEMCO scored 4 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 10.11.

CHEMCO had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign that it's running ahead of 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.