Safe and Sound

UARK

Fayetteville, AR
4
Star Rating
UARK is an NCUA-insured credit union founded in 1965 and currently headquartered in Fayetteville, AR. The credit union has $56.9 million in assets, according to December 31, 2017, regulatory filings.

Members have $42.5 million on deposit tended by 14 full-time employees. With that footprint, the credit union currently holds loans and leases worth $42.5 million. UARK's 9,263 members currently have $50.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UARK exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members during periods of economic instability for the credit union. Therefore, when it comes to measuring an a credit union's financial stability, capital is useful. When it comes to safety and soundness, the more capital, the better.

UARK came in below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, scoring 12 out of a possible 30 points.

UARK appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

Having extensive holdings of these kinds of assets could eventually force a credit union to use capital to absorb losses, decreasing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, pushing down earnings and increasing the chances of a future failure.

UARK beat out the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

Troubled assets made up 0.00 percent of UARK's total assets in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, take away from a credit union's ability to do those things.

UARK exceeded the national average on Bankrate's test of earnings, achieving a score of 16 out of a possible 30.

UARK had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.