Safe and Sound

KALAMAZOO BUILDING TRADES

Kalamazoo, MI
3
Star Rating
Kalamazoo, MI-based KALAMAZOO BUILDING TRADES is an NCUA-insured credit union founded in 1965. The credit union has assets of $2.7 million, according to June 30, 2017, regulatory filings.

The credit union currently holds loans and leases worth $1.7 million. Its 600 members currently have $2.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, KALAMAZOO BUILDING TRADES exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial strength. It works as a bulwark against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

KALAMAZOO BUILDING TRADES finished below the national average of 15.26 on our test to measure capital adequacy, achieving a score of 8 out of a possible 30 points.

KALAMAZOO BUILDING TRADES's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these kinds of assets could eventually require a credit union to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, KALAMAZOO BUILDING TRADES scored 40 out of a possible 40 points, beating the national average of 38.15 points.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the credit union better prepared to withstand financial trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's earnings test, KALAMAZOO BUILDING TRADES scored 0 out of a possible 30, coming in below the national average of 10.31.

One sign that KALAMAZOO BUILDING TRADES is running behind its peers in this area was its earnings ratio of -135.00 percent in our test, less 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.