Safe and Sound

FORT SMITH DIXIE CUP

FORT SMITH, AR
5
Star Rating
Founded in 1949, FORT SMITH DIXIE CUP is an NCUA-insured credit union based in FORT SMITH, AR. Regulatory filings show the credit union having $12.3 million in assets, as of December 31, 2017.

Thanks to the efforts of 2 full-time employees, the credit union has amassed loans and leases worth $3.7 million. FORT SMITH DIXIE CUP's 1,156 members currently have $9.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FORT SMITH DIXIE CUP exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is a valuable measurement of its financial resilience. When it comes to safety and soundness, more capital is better.

On our test to measure capital adequacy, FORT SMITH DIXIE CUP scored 30 out of a possible 30 points, exceeding the national average of 15.65.

FORT SMITH DIXIE CUP's capitalization ratio of 30.00 percent in our test was higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having large numbers of these types of assets suggests a credit union may have to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and increasing the risk of a failure in the future.

FORT SMITH DIXIE CUP scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

A below-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

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, FORT SMITH DIXIE CUP scored 6 out of a possible 30, lower than the national average of 10.11.

One indication that FORT SMITH DIXIE CUP is doing better than 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.