Asset Quality Score
In this test, Bankrate tries to determine the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.
Having lots of these kinds of assets suggests a credit union could eventually have to use capital to cover losses, reducing 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 future failure.
On Bankrate's test of asset quality, SMARTCHOICE scored 36 out of a possible 40 points, less than the national average of 38.09 points.
SMARTCHOICE's ratio of problem assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.