Safe and Sound

DIAMOND LAKES

MALVERN, AR
5
Star Rating
Founded in 1960, DIAMOND LAKES is an NCUA-insured credit union based in MALVERN, AR. As of December 31, 2017, the credit union had assets of $67.3 million.

Thanks to the efforts of 27 full-time employees, the credit union currently holds loans and leases worth $49.5 million. DIAMOND LAKES's 10,783 members currently have $58.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DIAMOND LAKES 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 major criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is key. It acts as a buffer against losses and provides protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, more capital is better.

On our test to measure capital adequacy, DIAMOND LAKES scored 16 out of a possible 30 points, beating the national average of 15.65.

DIAMOND LAKES's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand 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 a large number of these types of assets may eventually be forced to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, DIAMOND LAKES scored 40 out of a possible 40 points, beating out the national average of 38.09 points.

A lower-than-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 earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

DIAMOND LAKES scored 16 out of a possible 30 on Bankrate's test of earnings, above the national average of 10.11.

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