Asset Quality Score
In this test, Bankrate tries 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 may eventually be forced to use capital to cover losses, shrinking its buffer of equity. 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, pushing down earnings and increasing the chances of a future failure.
KAUAI GOVERNMENT EMPLOYEES fell below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .
A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.