Safe and Sound

NATURAL STATE

SEARCY, AR
5
Star Rating
NATURAL STATE is a SEARCY, AR-based, NCUA-insured credit union dating back to 1956. Regulatory filings show the credit union having assets of $5.2 million, as of December 31, 2017.

Thanks to the work of 3 full-time employees, the credit union currently holds loans and leases worth $4.1 million. NATURAL STATE's 1,287 members currently have $4.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NATURAL STATE exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial strength. It works as a cushion against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.

NATURAL STATE racked up 26 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

NATURAL STATE 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

Bankrate uses this test to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these kinds of assets could eventually have to use capital to cover losses, shrinking its cushion 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 depressed earnings and potentially more risk of a failure in the future.

NATURAL STATE scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 38.09.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand economic trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

NATURAL STATE exceeded the national average on Bankrate's test of earnings, achieving a score of 18 out of a possible 30.

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.