Safe and Sound

DILLARD'S

LITTLE ROCK, AR
3
Star Rating
DILLARD'S is a LITTLE ROCK, AR-based, NCUA-insured credit union started in 1973. As of December 31, 2017, the credit union had assets of $26.3 million.

Thanks to the work of 7 full-time employees, the credit union has amassed loans and leases worth $11.0 million. DILLARD'S's 5,774 members currently have $23.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DILLARD'S exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is key. It acts as a cushion against losses and provides protection for members when a credit union is struggling financially. When looking at safety and soundness, more capital is better.

DILLARD'S received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, coming in below the national average of 15.65.

DILLARD'S had a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid loans.

Having large numbers of these types of assets means a credit union could eventually have to use capital to absorb losses, cutting down on 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, resulting in depressed earnings and potentially more risk of a future failure.

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

Troubled assets made up 0.00 percent of DILLARD'S's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

DILLARD'S did below-average on Bankrate's test of earnings, achieving a score of 2 out of a possible 30.

DILLARD'S had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's outperforming 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.