Asset Quality Score
This test's purpose is to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.
A credit union with extensive holdings of these types of assets could eventually have to use capital to absorb losses, reducing its cushion 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, resulting in lower earnings and potentially more risk of a future failure.
FIRST JERSEY fell short of the national average of 38.09 on Bankrate's test of asset quality, racking up 0 out of a possible 40 points .
The credit union's ratio of troubled assets was 1.00 percent in our test, identical to the national average.