Asset Quality Score
Bankrate uses this test to determine 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.
Having large numbers of these types of assets suggests a credit union may eventually have 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 interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.
ALABAMA TEACHERS beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .
A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.