Safe and Sound

CAROLINA

CHERRYVILLE, NC
2
Star Rating
CAROLINA is an NCUA-insured credit union founded in 1969 and currently headquartered in CHERRYVILLE, NC. Regulatory filings show the credit union having assets of $49.7 million, as of December 31, 2017.

Members have $34.8 million on deposit tended by 14 full-time employees. With that footprint, the credit union has amassed loans and leases worth $34.8 million. CAROLINA's 5,885 members currently have $44.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CAROLINA exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members during periods of economic instability for the credit union. It follows then that a credit union's level of capital is an important measurement of its financial strength. When looking at safety and soundness, the more capital, the better.

CAROLINA received a score of 10 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

CAROLINA's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings 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, resulting in diminished earnings and potentially more risk of a future failure.

CAROLINA scored 28 out of a possible 40 points on Bankrate's test of asset quality, below the national average of 38.09.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, CAROLINA scored 0 out of a possible 30, falling short of the national average of 10.11.

One indication that CAROLINA is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, higher than the average for all credit unions.

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.