Safe and Sound

KINECTA

MANHATTAN BEACH, CA
4
Star Rating
KINECTA is a MANHATTAN BEACH, CA-based, NCUA-insured credit union that opened its doors in 1940. Regulatory filings show the credit union having $4.25 billion in assets, as of December 31, 2017.

Members have $3.63 billion on deposit tended by 842 full-time employees. With that footprint, the credit union holds loans and leases worth $3.63 billion. Its 291,297 members currently have $3.69 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KINECTA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is crucial. It works as a cushion against losses and affords protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, KINECTA received a score of 6 out of a possible 30 points, below the national average of 15.65.

KINECTA had a capitalization ratio of 6.00 percent in our test, less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

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

Having a large number of these kinds of assets may eventually force a credit union to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, decreasing earnings and elevating the chances of a failure in the future.

KINECTA scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.

The credit union's ratio of troubled 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 making money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's earnings test, KINECTA scored 14 out of a possible 30, beating the national average of 10.11.

One sign that the credit union 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.