Safe and Sound

KRAFTCOR

HAWESVILLE, KY
4
Star Rating
Started in 1972, KRAFTCOR is an NCUA-insured credit union headquartered in HAWESVILLE, KY. The credit union has assets of $14.5 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 5 full-time employees, the credit union has amassed loans and leases worth $8.2 million. KRAFTCOR's 1,688 members currently have $12.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KRAFTCOR exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is important. It works as a cushion against losses and affords protection for members when a credit union is experiencing economic instability. From a safety and soundness perspective, more capital is better.

KRAFTCOR did better than the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 16 out of a possible 30 points.

KRAFTCOR's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets could eventually require 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, reducing earnings and increasing the chances of a failure in the future.

KRAFTCOR scored 40 out of a possible 40 points on Bankrate's asset quality test, better than 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 greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings can be retained by the credit union, boosting 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.

KRAFTCOR fell short of the national average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

KRAFTCOR had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.