Safe and Sound

EASTERN KENTUCKY

PRESTONSBURG, KY
2
Star Rating
EASTERN KENTUCKY is an NCUA-insured credit union founded in 1969 and currently headquartered in PRESTONSBURG, KY. Regulatory filings show the credit union having $4.7 million in assets, as of December 31, 2017.

With 2 full-time employees, the credit union currently holds loans and leases worth $3.6 million. Its 516 members currently have $3.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, EASTERN KENTUCKY 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 did on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during times of financial instability for the credit union. It follows then that a credit union's level of capital is a useful measurement of its financial resilience. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, EASTERN KENTUCKY scored 26 out of a possible 30 points, above the national average of 15.65.

EASTERN KENTUCKY appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 26.00 percent in our test, above the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these types of assets means a credit union may eventually have to use capital to absorb losses, reducing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a failure in the future.

EASTERN KENTUCKY finished below the national average of 38.09 on Bankrate's test of asset quality, racking up 28 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, have less ability to do those things.

EASTERN KENTUCKY fell short of the national average on Bankrate's earnings test, achieving a score of 0 out of a possible 30.

One indication that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher than the average for all credit unions.

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.