Safe and Sound

SPIRIT OF ALASKA

Fairbanks, AK
4
Star Rating
Fairbanks, AK-based SPIRIT OF ALASKA is an NCUA-insured credit union started in 1960. As of June 30, 2017, the credit union had assets of $150.3 million.

Members have $105.5 million on deposit tended by 54 full-time employees. With that footprint, the credit union holds loans and leases worth $105.5 million. Its 9,562 members currently have $130.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, SPIRIT OF ALASKA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for members when a credit union is experiencing economic instability. Therefore, a credit union's level of capital is a key measurement of its financial strength. When looking at safety and soundness, the more capital, the better.

SPIRIT OF ALASKA finished below the national average of 15.26 on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

SPIRIT OF ALASKA's capitalization ratio of 11.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

A credit union with large numbers of these types of assets may eventually have to use capital to absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's asset quality test, SPIRIT OF ALASKA scored 36 out of a possible 40 points, failing to reach the national average of 38.15 points.

SPIRIT OF ALASKA's ratio of troubled assets was 11.00 percent in our test, greater than the national average and something to watch.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

On Bankrate's test of earnings, SPIRIT OF ALASKA scored 10 out of a possible 30, lower than the national average of 10.31.

SPIRIT OF ALASKA had an earnings ratio of 5.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.