Asset Quality Score
Bankrate uses this test to estimate the effect of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with a large number of these types of assets could eventually be forced to use capital to absorb 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 money, diminishing earnings and increasing the risk of a failure in the future.
NEWARK POLICE scored above the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .
A lower-than-average ratio of problem assets of 5.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.