Asset Quality Score
This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.
A credit union with lots of these kinds of assets may eventually have 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 lower earnings and potentially more risk of a failure in the future.
VALLEY FCU OF MONTANA scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.
The credit union's ratio of problem assets was 0.00 percent in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.