Asset Quality Score
Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, 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 types of assets could eventually be required to use capital to absorb losses, diminishing 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 diminished earnings and potentially more risk of a future failure.
TEXAS ASSOCIATIONS OF PROFESSIONALS fell below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.