Safe and Sound

FRIENDS FIRST

OWENSBORO, KY
2
Star Rating
Started in 1974, FRIENDS FIRST is an NCUA-insured credit union based in OWENSBORO, KY. As of December 31, 2017, the credit union held assets of $5.6 million.

With 2 full-time employees, the credit union holds loans and leases worth $2.4 million. Its 1,032 members currently have $5.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FRIENDS FIRST 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 major criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial strength, capital is essential. It works as a buffer against losses and provides protection for members when a credit union is experiencing economic instability. When looking at safety and soundness, more capital is preferred.

FRIENDS FIRST fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 4 out of a possible 30 points.

FRIENDS FIRST appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 4.00 percent in our test, less than 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 large numbers of these types of assets may eventually have to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and increasing the chances of a future failure.

FRIENDS FIRST did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

FRIENDS FIRST's ratio of problem assets was 0.00 percent in our test, beneath the national average and suggestive 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. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, FRIENDS FIRST scored 0 out of a possible 30, lower 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, a sign 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.