Asset Quality Score
In this test, Bankrate tries to estimate the effect of problem assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with lots of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its buffer 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 lower earnings and potentially more risk of a future failure.
SOUTHEAST FINANCIAL scored 28 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 38.15.
An above-average ratio of problem assets of 25.00 percent in our test was a potential cause for concern for SOUTHEAST FINANCIAL.