Asset Quality Score
In this test, Bankrate tries to determine the impact of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.
A credit union with large numbers of these kinds of assets may eventually be forced to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a failure in the future.
NORTHERN REDWOOD did better than the national average of 38.15 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .
A lower-than-average ratio of problem assets of 3.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.