Safe and Sound

MOREHEAD COMMUNITY

Morehead, KY
4
Star Rating
MOREHEAD COMMUNITY is a Morehead, KY-based, NCUA-insured credit union founded in 1978. Regulatory filings show the credit union having assets of $33.1 million, as of December 31, 2017.

Thanks to the efforts of 11 full-time employees, the credit union currently holds loans and leases worth $16.8 million. MOREHEAD COMMUNITY's 3,766 members currently have $29.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, MOREHEAD COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade U.S. 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, a credit union's level of capital is a valuable measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

MOREHEAD COMMUNITY finished below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 14 out of a possible 30 points.

MOREHEAD COMMUNITY had a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions, a sign that it's weaker than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these kinds of assets could eventually have to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

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

A below-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 making money affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, MOREHEAD COMMUNITY scored 14 out of a possible 30, better than the national average of 10.11.

MOREHEAD COMMUNITY had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.