Safe and Sound

AFFINITY

Basking Ridge, NJ
4
Star Rating
AFFINITY is a Basking Ridge, NJ-based, NCUA-insured credit union started in 1935. Regulatory filings show the credit union having assets of $2.99 billion, as of December 31, 2017.

With 429 full-time employees, the credit union currently holds loans and leases worth $2.59 billion. AFFINITY's 158,326 members currently have $2.30 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, AFFINITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is essential. It works as a buffer against losses and provides protection for members when a credit union is experiencing economic instability. When it comes to safety and soundness, more capital is preferred.

On our test to measure capital adequacy, AFFINITY received a score of 6 out of a possible 30 points, less than the national average of 15.65.

AFFINITY's capitalization ratio of 6.00 percent in our test was worse than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets may eventually be forced to use capital to cover losses, cutting down on its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, reducing earnings and elevating the risk of a failure in the future.

AFFINITY fell short of the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

AFFINITY's ratio of troubled assets was 0.00 percent in our test, less than the national average and 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 may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money have less ability to do those things.

AFFINITY scored 16 out of a possible 30 on Bankrate's test of earnings, above the national average of 10.11.

One indication that AFFINITY is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.