Safe and Sound

FOURTH WARD

amite, LA
3
Star Rating
Founded in 1952, FOURTH WARD is an NCUA-insured credit union headquartered in amite, LA. The credit union has $841,378 in assets, according to December 31, 2017, regulatory filings.

Its 202 members currently have $755,674 in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $333,398.

Overall, Bankrate believes that, as of December 31, 2017, FOURTH WARD exhibited a generally satisfactory condition, earning 3 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 evaluate U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is valuable. It acts as a cushion against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, FOURTH WARD received a score of 12 out of a possible 30 points, below the national average of 15.65.

FOURTH WARD had a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate 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 unpaid loans.

Having large numbers of these kinds of assets could eventually require a credit union to use capital to cover losses, diminishing its buffer 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 diminished earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, FOURTH WARD scored 36 out of a possible 40 points, less than the national average of 38.09 points.

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

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or use them to address problematic loans, likely making the credit union more resilient in tough times. Credit unions that are losing money, however, are less able to do those things.

FOURTH WARD scored 2 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.