Safe and Sound

SOUTHEASTERN ARIZONA

Douglas, AZ
4
Star Rating
SOUTHEASTERN ARIZONA is a Douglas, AZ-based, NCUA-insured credit union founded in 1954. As of December 31, 2017, the credit union had assets of $32.5 million.

With 11 full-time employees, the credit union currently holds loans and leases worth $20.3 million. SOUTHEASTERN ARIZONA's 5,784 members currently have $28.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHEASTERN ARIZONA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to score American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial fortitude. It works as a buffer against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

SOUTHEASTERN ARIZONA achieved a score of 16 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

SOUTHEASTERN ARIZONA had a capitalization ratio of 16.00 percent in our test, the same as the average for all credit unions, a sign that it's right in line with its peers.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these types of assets could eventually be required to use capital to cover losses, decreasing 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 money, pushing down earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, SOUTHEASTERN ARIZONA scored 36 out of a possible 40 points, failing to reach the national average of 38.09 points.

The credit union's ratio of troubled assets was 0.00 percent in our test, lower than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

SOUTHEASTERN ARIZONA scored 4 out of a possible 30 on Bankrate's test of earnings, coming in below the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication that it's doing better than its peers in this area.

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.