Safe and Sound

NORTHROP GRUMMAN

Gardena, CA
3
Star Rating
Gardena, CA-based NORTHROP GRUMMAN is an NCUA-insured credit union founded in 1946. The credit union holds assets of $1.12 billion, according to June 30, 2017, regulatory filings.

Members have $580.8 million on deposit tended by 165 full-time employees. With that footprint, the credit union holds loans and leases worth $580.8 million. Its 51,222 members currently have $989.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NORTHROP GRUMMAN 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 major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is struggling financially. It follows then that a credit union's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, NORTHROP GRUMMAN received a score of 12 out of a possible 30 points, lower than the national average of 15.26.

NORTHROP GRUMMAN's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

A credit union with lots of these types of assets may eventually have to use capital to cover losses, reducing its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, NORTHROP GRUMMAN scored 40 out of a possible 40 points, beating the national average of 38.15 points.

A lower-than-average ratio of problem assets of 2.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. Earnings can 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 better able to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

NORTHROP GRUMMAN fell short of the national average on Bankrate's earnings test, achieving a score of 2 out of a possible 30.

NORTHROP GRUMMAN had an earnings ratio of 1.00 percent in our test, equal to the average for all credit unions, suggesting that it's running neck and neck with 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.