Safe and Sound

NORTH EAST KY CAP

Olive Hill, KY
4
Star Rating
NORTH EAST KY CAP is an Olive Hill, KY-based, NCUA-insured credit union founded in 1967. The credit union has assets of $133,983, according to December 31, 2017, regulatory filings.

The credit union currently holds loans and leases worth $60,978. Its 83 members currently have $97,228 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTH EAST KY CAP 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 key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an an institution's financial stability, capital is crucial. When it comes to safety and soundness, the more capital, the better.

NORTH EAST KY CAP achieved a score of 30 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

NORTH EAST KY CAP appears to be more resilient than its peers, with a capitalization ratio of 30.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled 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 cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and increasing the risk of a failure in the future.

NORTH EAST KY CAP scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.

Earnings score

How successful a credit union is at making money affects its long-term survivability. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's earnings test, NORTH EAST KY CAP scored 0 out of a possible 30, coming in below the national average of 10.11.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.