Safe and Sound

ESSEX COUNTY NJ EMPLOYEES

Newark, NJ
3
Star Rating
ESSEX COUNTY NJ EMPLOYEES is a Newark, NJ-based, NCUA-insured credit union founded in 1935. As of December 31, 2017, the credit union had assets of $6.4 million.

Members have $2.6 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $2.6 million. Its 2,076 members currently have $5.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, ESSEX COUNTY NJ EMPLOYEES exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial fortitude, capital is crucial. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, ESSEX COUNTY NJ EMPLOYEES received a score of 14 out of a possible 30 points, below the national average of 15.65.

ESSEX COUNTY NJ EMPLOYEES had a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets may eventually have to use capital to absorb losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, ESSEX COUNTY NJ EMPLOYEES scored 40 out of a possible 40 points, above the national average of 38.09 points.

The credit union's ratio of problem assets was 0.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

ESSEX COUNTY NJ EMPLOYEES scored 0 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 10.11.

One indication that ESSEX COUNTY NJ EMPLOYEES 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.