An important consideration for the design of seismic isolation systems composed of elastomeric bearings is the safety of individual bearings for maximum considered earthquake shaking. One assessment of bearing safety requires the bearing be stable at the maximum displacement that requires the reduced critical load carrying capacity be greater than the compressive load imposed on the bearing. Typically the reduced critical load carrying capacity is assessed using an overlapping area procedure whereby the critical load capacity at zero lateral displacement is reduced by the ratio of the overlapping area between the top and bottom bearing end plates divided by the total bonded rubber area for a given lateral displacement. Although the overlapping area procedure provides a simple method of estimating the load carrying capacity of an elastomeric seismic isolation bearing in the laterally deformed configuration previous research suggest the predictions are overly conservative and do not agree well with experimental data. This paper presents the results of a numerical study of the stability of an elastomeric seismic isolation bearing under large lateral displacement using the finite element method (FE). Results from the FE analyses show that the reduction in critical load carrying capacity does not decrease linearly with increasing lateral displacement as is approximately suggested by the overlapping area approach. A comparison of the FE results with the reduced critical load predicted by the overlapping area procedure suggests that the overlapping area approach significantly underestimates the load carrying capacity of elastomeric bearings in the laterally deformed configuration predicting zero capacity at a lateral displacement equal to the bearing diameter. An improved formula for predicting the reduction in critical load with lateral displacement based on the Koh-Kelly two-spring model is explored.