Asset Quality Score
In this test, Bankrate tries to determine the effect 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 extensive holdings of these kinds of assets could eventually have to use capital to absorb losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.
On Bankrate's test of asset quality, ROYAL scored 40 out of a possible 40 points, better than the national average of 38.09 points.
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.