Safe and Sound

FIRST NORTHERN

CHICAGO, IL
3
Star Rating
FIRST NORTHERN is an NCUA-insured credit union founded in 1944 and currently headquartered in CHICAGO, IL. Regulatory filings show the credit union having $325.4 million in assets, as of June 30, 2017.

Thanks to the work of 70 full-time employees, the credit union has amassed loans and leases worth $154.2 million. Its 23,626 members currently have $298.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, FIRST NORTHERN exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members when a credit union is experiencing economic instability. It follows then that a credit union's level of capital is a key measurement of its financial strength. When it comes to safety and soundness, the more capital, the better.

FIRST NORTHERN received a score of 6 out of a possible 30 points on our test to measure capital adequacy, below the national average of 15.26.

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

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these kinds of assets means a credit union could have to use capital to absorb 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, resulting in reduced earnings and potentially more risk of a future failure.

FIRST NORTHERN scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.15.

A below-average ratio of problem assets of 2.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses lessen a credit union's ability to do those things.

FIRST NORTHERN fell behind the national average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

The credit union had an earnings ratio of 3.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.