Asset Quality Score
Bankrate uses this test to estimate the impact of problem 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 a large number of these types of assets may eventually be required to use capital to cover losses, reducing its equity buffer. 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, diminishing earnings and elevating the risk of a future failure.
VALLEY ISLE COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.
A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.