Safe and Sound

LETCHER COUNTY TEACHERS

WHITESBURG, KY
5
Star Rating
LETCHER COUNTY TEACHERS is a Whitesburg, KY-based, NCUA-insured credit union founded in 1964. The credit union holds assets of $1.0 million, according to December 31, 2017, regulatory filings.

The credit union has amassed loans and leases worth $522,008. Its 418 members currently have $811,424 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LETCHER COUNTY TEACHERS exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members when a credit union is struggling financially. It follows then that a credit union's level of capital is an important measurement of its financial strength. When it comes to safety and soundness, more capital is preferred.

LETCHER COUNTY TEACHERS racked up 30 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

LETCHER COUNTY TEACHERS's capitalization ratio of 30.00 percent in our test was higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid loans.

A credit union with large numbers of these types of assets may eventually be required to use capital to absorb losses, shrinking its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

LETCHER COUNTY TEACHERS 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, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, LETCHER COUNTY TEACHERS scored 6 out of a possible 30, less than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign 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.