Safe and Sound

FIRST NORTHERN

CHICAGO, IL
3
Star Rating
CHICAGO, IL-based FIRST NORTHERN is an NCUA-insured credit union founded in 1944. As of December 31, 2017, the credit union had assets of $316.3 million.

Thanks to the work of 70 full-time employees, the credit union holds loans and leases worth $163.0 million. Its 23,742 members currently have $289.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, FIRST NORTHERN exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial resilience. It acts as a cushion against losses and provides protection for members during periods of economic trouble for the credit union. From a safety and soundness perspective, the more capital, the better.

FIRST NORTHERN received a score of 6 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

FIRST NORTHERN's capitalization ratio of 6.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

Having a large number of these types of assets suggests a credit union may 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 thus aren't earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

FIRST NORTHERN scored 40 out of a possible 40 points on Bankrate's asset quality test, beating out the national average of 38.09.

Troubled assets made up 0.00 percent of the credit union's total assets in our test, lower than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

FIRST NORTHERN scored 6 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 10.11.

One indication that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, higher than 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.