Safe and Sound

NAVY FEDERAL CREDIT UNION

VIENNA, VA
5
Star Rating
NAVY FEDERAL CREDIT UNION is an NCUA-insured credit union founded in 1947 and currently headquartered in VIENNA, VA. The credit union holds $82.04 billion in assets, according to June 30, 2017, regulatory filings.

Members have $61.22 billion on deposit tended by 13,843 full-time employees. With that footprint, the credit union currently holds loans and leases worth $61.22 billion. Its 7,188,926 members currently have $60.31 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NAVY FEDERAL CREDIT UNION exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is crucial. It acts as a buffer against losses and provides protection for members during times of economic instability for the credit union. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, NAVY FEDERAL CREDIT UNION received a score of 14 out of a possible 30 points, less than the national average of 15.26.

NAVY FEDERAL CREDIT UNION's capitalization ratio of 12.00 percent in our test was less than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these kinds of assets could eventually be required to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, pushing down earnings and increasing the chances of a future failure.

NAVY FEDERAL CREDIT UNION scored 40 out of a possible 40 points on Bankrate's test of asset quality, above the national average of 38.15.

A lower-than-average ratio of problem assets of 6.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, NAVY FEDERAL CREDIT UNION scored 22 out of a possible 30, beating out the national average of 10.31.

One indication that the credit union is outperforming its peers in this area was its earnings ratio of 14.00 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.