Safe and Sound

DISTRICT 05 DOTD

MONROE, LA
4
Star Rating
DISTRICT 05 DOTD is a MONROE, LA-based, NCUA-insured credit union dating back to 1961. As of December 31, 2017, the credit union had assets of $7.6 million.

Members have $3.6 million on deposit tended by 3 full-time employees. With that footprint, the credit union currently holds loans and leases worth $3.6 million. Its 1,314 members currently have $6.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DISTRICT 05 DOTD exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is useful. It works as a cushion against losses and as protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.

DISTRICT 05 DOTD scored above the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 30 out of a possible 30 points.

DISTRICT 05 DOTD appears to be stronger than its peers, with a capitalization ratio of 30.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

This test's purpose is 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 problem assets, such as past-due mortgages.

A credit union with a large number of these kinds of assets may eventually be required to use capital to absorb losses, cutting down on its cushion of equity. 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, reducing earnings and elevating the chances of a future failure.

DISTRICT 05 DOTD scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.

A lower-than-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

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's test of earnings, DISTRICT 05 DOTD 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, better 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.