Safe and Sound

KSW

WATERVILLE, ME
4
Star Rating
WATERVILLE, ME-based KSW is an NCUA-insured credit union founded in 1954. Regulatory filings show the credit union having assets of $60.8 million, as of December 31, 2017.

With 19 full-time employees, the credit union holds loans and leases worth $55.8 million. KSW's 9,896 members currently have $51.9 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an a credit union's financial strength, capital is essential. When it comes to safety and soundness, the more capital, the better.

KSW fell short of the national average of 15.65 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

KSW's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, a sign 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 mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, decreasing earnings and elevating the chances of a failure in the future.

KSW fell below the national average of 38.09 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

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 has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital buffer, 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.

KSW beat the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

One indication that KSW is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.