Safe and Sound

KEKAHA

Kekaha, HI
5
Star Rating
Kekaha, HI-based KEKAHA is an NCUA-insured credit union started in 1938. Regulatory filings show the credit union having assets of $19.7 million, as of December 31, 2017.

With 3 full-time employees, the credit union currently holds loans and leases worth $11.0 million. KEKAHA's 1,734 members currently have $15.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KEKAHA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial resilience. It acts as a bulwark against losses and as protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.

KEKAHA did better than the national average of 15.65 points on our test to measure capital adequacy, scoring 30 out of a possible 30 points.

KEKAHA had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, a sign that it could be more resilient in a crisis than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid loans.

Having lots of these types of assets may eventually force a credit union 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 interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.

KEKAHA came in below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

Troubled assets made up 0.00 percent of KEKAHA's total assets 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 safety and soundness. Earnings can be retained by the credit union, expanding 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.

KEKAHA scored 6 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.11.

One sign that KEKAHA is beating 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.