Safe and Sound

KEARNY MUNICIPAL EMPLOYEES

KEARNY, NJ
4
Star Rating
KEARNY MUNICIPAL EMPLOYEES is an NCUA-insured credit union founded in 1955 and currently headquartered in KEARNY, NJ. As of December 31, 2017, the credit union had assets of $9.2 million.

The credit union currently holds loans and leases worth $1.3 million. Its 803 members currently have $7.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KEARNY MUNICIPAL EMPLOYEES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and affords protection for members during periods of economic trouble for the credit union. Therefore, an institution's level of capital is an important measurement of its financial fortitude. From a safety and soundness perspective, more capital is better.

On our test to measure capital adequacy, KEARNY MUNICIPAL EMPLOYEES racked up 24 out of a possible 30 points, above the national average of 15.65.

KEARNY MUNICIPAL EMPLOYEES had a capitalization ratio of 24.00 percent in our test, higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these kinds of assets could eventually be required to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, KEARNY MUNICIPAL EMPLOYEES scored 36 out of a possible 40 points, less than the national average of 38.09 points.

KEARNY MUNICIPAL EMPLOYEES's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

KEARNY MUNICIPAL EMPLOYEES scored 2 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

One sign that KEARNY MUNICIPAL EMPLOYEES is beating 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.