Safe and Sound

NOVA UA

CLIFTON, NJ
4
Star Rating
NOVA UA is a CLIFTON, NJ-based, NCUA-insured credit union founded in 1960. The credit union holds $115.7 million in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 10 full-time employees, the credit union has amassed loans and leases worth $54.6 million. NOVA UA's 3,703 members currently have $93.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NOVA UA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three important criteria Bankrate used to grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is important. It works as a buffer against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

NOVA UA achieved a score of 18 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating the national average of 15.26.

NOVA UA appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 14.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

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

Having a large number of these types of assets could eventually force a credit union to use capital to absorb losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, decreasing earnings and increasing the chances of a failure in the future.

NOVA UA scored above the national average of 38.15 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

Troubled assets made up 2.00 percent of the credit union's total assets in our test, below the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, NOVA UA scored 0 out of a possible 30, lower than the national average of 10.31.

NOVA UA had an earnings ratio of -1.00 percent in our test, less than the average for all credit unions, suggesting 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.