Safe and Sound

AFFINITY

Basking Ridge, NJ
4
Star Rating
AFFINITY is an NCUA-insured credit union founded in 1935 and currently based in Basking Ridge, NJ. The credit union has assets of $2.78 billion, according to June 30, 2017, regulatory filings.

Members have $2.42 billion on deposit tended by 396 full-time employees. With that footprint, the credit union has amassed loans and leases worth $2.42 billion. Its 141,070 members currently have $2.23 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, AFFINITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during times of financial instability for the credit union. It follows then that a credit union's level of capital is an essential measurement of its financial resilience. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, AFFINITY received a score of 8 out of a possible 30 points, coming in below the national average of 15.26.

AFFINITY had a capitalization ratio of 8.00 percent in our test, less than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

This test's purpose is 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.

Having large numbers of these types of assets may eventually require a credit union to use capital to cover losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a future failure.

AFFINITY scored 36 out of a possible 40 points on Bankrate's asset quality test, less than the national average of 38.15.

A higher-than-average ratio of problem assets of 8.00 percent in our test was something to keep an eye on for AFFINITY.

Earnings score

A credit union's earnings performance affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, are less able to do those things.

AFFINITY scored 16 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.31.

AFFINITY had an earnings ratio of 7.00 percent in our test, better than the average for all credit unions, suggesting 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.