Asset Quality Score
In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.
Having extensive holdings of these types of assets could eventually require a credit union to use capital to absorb losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.
LOCAL GOVERNMENT scored 36 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 38.15.
LOCAL GOVERNMENT's ratio of problem assets was 13.00 percent in our test, higher than the national average and a potential cause for concern.