Safe and Sound

CITY OF FAIRBANKS

Fairbanks, AK
3
Star Rating
Founded in 1961, CITY OF FAIRBANKS is an NCUA-insured credit union based in Fairbanks, AK. As of December 31, 2017, the credit union held assets of $1.8 million.

The credit union currently holds loans and leases worth $1.2 million. Its 387 members currently have $1.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CITY OF FAIRBANKS 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 evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing economic trouble. It follows then that an institution's level of capital is a crucial measurement of its financial resilience. From a safety and soundness perspective, the higher the capital, the better.

CITY OF FAIRBANKS scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, receiving a score of 26 out of a possible 30 points.

CITY OF FAIRBANKS had a capitalization ratio of 26.00 percent in our test, better than the average for all credit unions, an indication that it's on more solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with large numbers of these types of assets could eventually be required to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and elevating the chances of a future failure.

CITY OF FAIRBANKS scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

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

A credit union's profitability has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's test of earnings, CITY OF FAIRBANKS scored 0 out of a possible 30, below the national average of 10.11.

One sign that the credit union is beating 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.