Safe and Sound

FORT SMITH TEACHERS

FORT SMITH, AR
4
Star Rating
FORT SMITH TEACHERS is an NCUA-insured credit union started in 1936 and currently based in FORT SMITH, AR. The credit union has assets of $13.1 million, according to December 31, 2017, regulatory filings.

With 3 full-time employees, the credit union currently holds loans and leases worth $2.8 million. Its 1,599 members currently have $10.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FORT SMITH TEACHERS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial fortitude. It works as a buffer against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

FORT SMITH TEACHERS scored 26 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 15.65.

FORT SMITH TEACHERS appears to be more resilient than its peers, with a capitalization ratio of 26.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets may eventually be required to use capital to cover losses, decreasing its equity cushion. 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 depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, FORT SMITH TEACHERS scored 40 out of a possible 40 points, better than the national average of 38.09 points.

FORT SMITH TEACHERS's ratio of problem assets was 0.00 percent in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital cushion, or be used to address problematic loans, likely making the credit union better able to withstand financial trouble. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's test of earnings, FORT SMITH TEACHERS scored 2 out of a possible 30, falling short of 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.