Safe and Sound

FIRST FRONTIER

LYNBROOK, NY
5
Star Rating
LYNBROOK, NY-based FIRST FRONTIER is an NCUA-insured credit union started in 1986. As of December 31, 2017, the credit union held assets of $486,672.

The credit union has amassed loans and leases worth $263,699. Its 107 members currently have $432,164 in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST FRONTIER exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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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 experiencing financial trouble. It follows then that when it comes to measuring an a credit union's financial stability, capital is useful. From a safety and soundness perspective, the more capital, the better.

FIRST FRONTIER received a score of 14 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

FIRST FRONTIER appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 14.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, 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 have to use capital to absorb losses, reducing 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 money, pushing down earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, FIRST FRONTIER scored 36 out of a possible 40 points, lower than the national average of 38.09 points.

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

Earnings score

A credit union's profitability has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's earnings test, FIRST FRONTIER scored 26 out of a possible 30, above the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.