Safe and Sound

FAYETTEVILLE POSTAL

FAYETTEVILLE, NC
3
Star Rating
FAYETTEVILLE, NC-based FAYETTEVILLE POSTAL is an NCUA-insured credit union founded in 1928. The credit union holds $8.9 million in assets, according to December 31, 2017, regulatory filings.

Members have $4.5 million on deposit tended by 4 full-time employees. With that footprint, the credit union holds loans and leases worth $4.5 million. Its 1,665 members currently have $8.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FAYETTEVILLE POSTAL exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is experiencing economic trouble. Therefore, an institution's level of capital is a key measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

FAYETTEVILLE POSTAL received a score of 6 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.65.

FAYETTEVILLE POSTAL appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 6.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as 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 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, resulting in lower earnings and potentially more risk of a future failure.

FAYETTEVILLE POSTAL scored 32 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.09.

FAYETTEVILLE POSTAL's ratio of troubled assets was 0.00 percent in our test, less than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's test of earnings, FAYETTEVILLE POSTAL scored 10 out of a possible 30, falling short of the national average of 10.11.

One sign that FAYETTEVILLE POSTAL is running ahead of 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.