Safe and Sound

ARKANSAS FARM BUREAU

Little Rock, AR
5
Star Rating
Started in 1958, ARKANSAS FARM BUREAU is an NCUA-insured credit union headquartered in Little Rock, AR. As of December 31, 2017, the credit union had assets of $9.3 million.

Its 610 members currently have $7.6 million in shares with the credit union. With that footprint, the credit union holds loans and leases worth $3.9 million.

Overall, Bankrate believes that, as of December 31, 2017, ARKANSAS FARM BUREAU exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for members when a credit union is experiencing economic trouble. It follows then that an institution's level of capital is an important measurement of its financial resilience. When it comes to safety and soundness, more capital is preferred.

ARKANSAS FARM BUREAU racked up 28 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

ARKANSAS FARM BUREAU appears to be stronger than its peers, with a capitalization ratio of 28.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

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

A credit union with a large number of these kinds of assets may eventually have to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

ARKANSAS FARM BUREAU did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

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

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Credit unions that are losing money, however, have less ability to do those things.

ARKANSAS FARM BUREAU scored 4 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's doing better than 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.