Safe and Sound

FREEDOM NORTHWEST

KAMIAH, ID
5
Star Rating
FREEDOM NORTHWEST is a KAMIAH, ID-based, NCUA-insured credit union founded in 1963. Regulatory filings show the credit union having assets of $115.4 million, as of December 31, 2017.

Members have $96.8 million on deposit tended by 31 full-time employees. With that footprint, the credit union currently holds loans and leases worth $96.8 million. FREEDOM NORTHWEST's 6,596 members currently have $81.3 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is an important measurement of its financial resilience. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, FREEDOM NORTHWEST received a score of 10 out of a possible 30 points, failing to reach the national average of 15.65.

FREEDOM NORTHWEST's capitalization ratio of 10.00 percent in our test was below 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 troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

Having lots of these kinds of assets may eventually require a credit union to use capital to absorb losses, decreasing 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 money, reducing earnings and increasing the chances of a failure in the future.

FREEDOM NORTHWEST exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand financial shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

FREEDOM NORTHWEST scored 24 out of a possible 30 on Bankrate's test of earnings, beating the national average of 10.11.

FREEDOM NORTHWEST had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, an indication that it's outperforming 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.