Safe and Sound

UNIVERSITY OF KENTUCKY

LEXINGTON, KY
5
Star Rating
Lexington, KY-based UNIVERSITY OF KENTUCKY is an NCUA-insured credit union founded in 1937. The credit union holds assets of $760.5 million, according to December 31, 2017, regulatory filings.

With 166 full-time employees, the credit union holds loans and leases worth $611.3 million. Its 69,891 members currently have $638.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UNIVERSITY OF KENTUCKY exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to grade U.S. credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial resilience. It acts as a bulwark against losses and provides protection for members when a credit union is experiencing financial instability. When it comes to safety and soundness, the more capital, the better.

UNIVERSITY OF KENTUCKY fell below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

UNIVERSITY OF KENTUCKY appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 14.00 percent in our test, below the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the impact 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.

A credit union with large numbers of these kinds of assets could eventually be required to use capital to cover losses, diminishing its equity cushion. 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, decreasing earnings and elevating the risk of a failure in the future.

On Bankrate's asset quality test, UNIVERSITY OF KENTUCKY scored 40 out of a possible 40 points, beating the national average of 38.09 points.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, likely making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

UNIVERSITY OF KENTUCKY outperformed the average on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

UNIVERSITY OF KENTUCKY had an earnings ratio of 0.00 percent in our test, above 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.