Asset Quality Score
Bankrate uses this test to estimate the effect of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with large numbers of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing 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, reducing earnings and elevating the risk of a failure in the future.
KOHLER scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.