Safe and Sound

KEMBA

West Chester, OH
5
Star Rating
KEMBA is an NCUA-insured credit union started in 1934 and currently based in West Chester, OH. The credit union holds assets of $857.5 million, according to December 31, 2017, regulatory filings.

Members have $720.2 million on deposit tended by 166 full-time employees. With that footprint, the credit union currently holds loans and leases worth $720.2 million. KEMBA's 93,553 members currently have $725.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KEMBA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is useful. From a safety and soundness perspective, the higher the capital, the better.

KEMBA fell short of the national average of 15.65 on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

KEMBA's capitalization ratio of 14.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these types of assets suggests a credit union could have to use capital to cover losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

KEMBA exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of KEMBA's total assets in our test, lower than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

KEMBA received above-average marks on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

KEMBA had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting 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.