Safe and Sound

CREDIT UNION OF NEW JERSEY

EWING, NJ
2
Star Rating
CREDIT UNION OF NEW JERSEY is an NCUA-insured credit union started in 1943 and currently based in EWING, NJ. The credit union holds assets of $346.9 million, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 77 full-time employees, the credit union currently holds loans and leases worth $310.3 million. CREDIT UNION OF NEW JERSEY's 40,214 members currently have $317.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, CREDIT UNION OF NEW JERSEY exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial resilience. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is better.

CREDIT UNION OF NEW JERSEY fell short of the national average of 15.26 on our test to measure capital adequacy, receiving a score of 6 out of a possible 30 points.

CREDIT UNION OF NEW JERSEY's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

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.

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

CREDIT UNION OF NEW JERSEY fell short of the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

One indication that CREDIT UNION OF NEW JERSEY is outperforming its peers in this area was its earnings ratio of 5.00 percent in our test, higher than the average for all credit unions.

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.