Asset Quality Score
In this test, Bankrate tries to determine the impact of troubled assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.
A credit union with lots of these types of assets could eventually be required to use capital to absorb losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a failure in the future.
MERCER scored 36 out of a possible 40 points on Bankrate's asset quality test, failing to reach the national average of 38.09.
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.