Safe and Sound

ARIZONA CENTRAL

Phoenix, AZ
3
Star Rating
Phoenix, AZ-based ARIZONA CENTRAL is an NCUA-insured credit union founded in 1939. As of December 31, 2017, the credit union held assets of $477.8 million.

Members have $341.1 million on deposit tended by 178 full-time employees. With that footprint, the credit union holds loans and leases worth $341.1 million. Its 56,864 members currently have $432.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ARIZONA CENTRAL exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial resilience. It acts as a bulwark against losses and affords protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, more capital is preferred.

ARIZONA CENTRAL received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

ARIZONA CENTRAL had a capitalization ratio of 8.00 percent in our test, below the average for all credit unions, an indication that it's on less solid financial footing than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these kinds of assets suggests a credit union could have to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, ARIZONA CENTRAL scored 36 out of a possible 40 points, coming in below the national average of 38.09 points.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

ARIZONA CENTRAL received below-average marks on Bankrate's earnings test, achieving a score of 8 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign 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.