Asset Quality Score
This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due loans.
Having extensive holdings of these types of assets means a credit union could eventually have to use capital to cover losses, shrinking its equity cushion. 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 elevating the risk of a failure in the future.
CREDIT UNION OF NEW JERSEY scored 28 out of a possible 40 points on Bankrate's test of asset quality, failing to reach the national average of 38.15.
Troubled assets made up 22.00 percent of the credit union's total assets in our test, higher than the national average and a potential area of concern.