Safe and Sound

NORTHEAST ALABAMA POSTAL

ANNISTON, AL
5
Star Rating
NORTHEAST ALABAMA POSTAL is an ANNISTON, AL-based, NCUA-insured credit union dating back to 1956. As of June 30, 2017, the credit union held assets of $12.5 million.

Thanks to the work of 3 full-time employees, the credit union holds loans and leases worth $8.7 million. Its 1,169 members currently have $10.1 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NORTHEAST ALABAMA POSTAL exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is experiencing financial instability. It follows then that a credit union's level of capital is a useful measurement of its financial fortitude. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, NORTHEAST ALABAMA POSTAL achieved a score of 28 out of a possible 30 points, exceeding the national average of 15.26.

NORTHEAST ALABAMA POSTAL had a capitalization ratio of 19.00 percent in our test, above the average for all credit unions, an indication that it's stronger than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

Having extensive holdings of these kinds of assets may eventually force a credit union to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a future failure.

NORTHEAST ALABAMA POSTAL scored above the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A below-average ratio of problem assets of 3.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

NORTHEAST ALABAMA POSTAL fell short of the national average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

NORTHEAST ALABAMA POSTAL had an earnings ratio of 0.00 percent in our test, worse than the average for all credit unions, suggesting that it's running behind 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.