Safe and Sound

KEL-CO

Cumberland, MD
3
Star Rating
KEL-CO is a Cumberland, MD-based, NCUA-insured credit union that opened its doors in 1955. Regulatory filings show the credit union having $48.3 million in assets, as of December 31, 2017.

With 14 full-time employees, the credit union currently holds loans and leases worth $22.5 million. Its 4,607 members currently have $41.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KEL-CO 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 did on the three major criteria Bankrate used to evaluate 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 affords protection for members during times of economic trouble for the credit union. It follows then that when it comes to measuring an an institution's financial stability, capital is crucial. When it comes to safety and soundness, more capital is better.

KEL-CO exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 18 out of a possible 30 points.

KEL-CO appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 18.00 percent in our test, higher than the average for all credit unions.

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 mortgages.

A credit union with a large number of these kinds of assets may eventually have to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a future failure.

KEL-CO scored 36 out of a possible 40 points on Bankrate's asset quality test, below the national average of 38.09.

Troubled assets made up 0.00 percent of KEL-CO's total assets in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

KEL-CO received below-average marks on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.

One indication that KEL-CO is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.