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 problem assets, such as past-due loans.
Having large numbers of these kinds of assets could eventually force a credit union to use capital to absorb losses, decreasing its equity cushion. 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, decreasing earnings and elevating the risk of a future failure.
LINN AREA finished below the national average of 38.15 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .
Troubled assets made up 10.00 percent of the credit union's total assets in our test, higher than the national average and a potential area of concern.