Safe and Sound

ARCADE

Asheville, NC
3
Star Rating
Asheville, NC-based ARCADE is an NCUA-insured credit union started in 1952. The credit union holds assets of $7.8 million, according to December 31, 2017, regulatory filings.

Members have $3.4 million on deposit tended by 2 full-time employees. With that footprint, the credit union holds loans and leases worth $3.4 million. Its 1,063 members currently have $6.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ARCADE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is useful. It works as a bulwark against losses and as protection for members during periods of economic trouble for the credit union. From a safety and soundness perspective, more capital is better.

ARCADE scored below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 14 out of a possible 30 points.

ARCADE had a capitalization ratio of 14.00 percent in our test, worse than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due loans.

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

ARCADE scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

Troubled assets made up 0.00 percent of ARCADE's total assets in our test, beneath the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's earnings test, ARCADE scored 0 out of a possible 30, less than the national average of 10.11.

ARCADE had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's outperforming 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.