Safe and Sound

NORTHERN PACIFIC DULUTH

Duluth, MN
5
Star Rating
Duluth, MN-based NORTHERN PACIFIC DULUTH is an NCUA-insured credit union started in 1936. Regulatory filings show the credit union having assets of $2.0 million, as of June 30, 2017.

Members have $1.6 million on deposit tended by 2 full-time employees. With that footprint, the credit union has amassed loans and leases worth $1.6 million. NORTHERN PACIFIC DULUTH's 1,099 members currently have $1.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NORTHERN PACIFIC DULUTH exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during periods of economic trouble for the credit union. It follows then that an institution's level of capital is an essential measurement of its financial strength. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, NORTHERN PACIFIC DULUTH achieved a score of 30 out of a possible 30 points, beating out the national average of 15.26.

NORTHERN PACIFIC DULUTH's capitalization ratio of 25.00 percent in our test was better than the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these types of assets may eventually be forced to use capital to absorb losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, NORTHERN PACIFIC DULUTH scored 40 out of a possible 40 points, above the national average of 38.15 points.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

NORTHERN PACIFIC DULUTH scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.31.

NORTHERN PACIFIC DULUTH had an earnings ratio of -7.00 percent in our test, less than the average for all credit unions, an indication that it's underperforming 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.