Safe and Sound

ARKANSAS KRAFT EMPLOYEES

MORRILTON, AR
5
Star Rating
ARKANSAS KRAFT EMPLOYEES is an NCUA-insured credit union started in 1966 and currently headquartered in Morrilton, AR. As of December 31, 2017, the credit union had assets of $4.5 million.

Its 558 members currently have $3.5 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $1.9 million.

Overall, Bankrate believes that, as of December 31, 2017, ARKANSAS KRAFT EMPLOYEES exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members during periods of financial instability for the credit union. Therefore, when it comes to measuring an an institution's financial stability, capital is crucial. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, ARKANSAS KRAFT EMPLOYEES scored 30 out of a possible 30 points, above the national average of 15.65.

ARKANSAS KRAFT EMPLOYEES had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

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

A credit union with lots of these types of assets could eventually be required to use capital to absorb losses, diminishing its equity buffer. It also means that there are likely to be many assets that are 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, ARKANSAS KRAFT EMPLOYEES scored 40 out of a possible 40 points, exceeding the national average of 38.09 points.

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

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings may be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Conversely, losses reduce a credit union's ability to do those things.

ARKANSAS KRAFT EMPLOYEES scored 6 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 10.11.

ARKANSAS KRAFT EMPLOYEES had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign 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.