Safe and Sound

N A R C

Beltsville, MD
NR
Star Rating
Beltsville, MD-based N A R C is an NCUA-insured credit union founded in 1939. Regulatory filings show the credit union having assets of $21.0 million, as of June 30, 2017.

Members have $4.8 million on deposit tended by 3 full-time employees. With that footprint, the credit union currently holds loans and leases worth $4.8 million. Its 2,251 members currently have $20.6 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, N A R C exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is a crucial measurement of its financial fortitude. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure capital adequacy, N A R C received a score of 0 out of a possible 30 points, below the national average of 15.26.

N A R C's capitalization ratio of 0.00 percent in our test was less 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 effect of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

Having large numbers of these types of assets could eventually force a credit union to use capital to cover losses, shrinking its cushion 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, pushing down earnings and elevating the risk of a failure in the future.

On Bankrate's asset quality test, N A R C scored 16 out of a possible 40 points, coming in below the national average of 38.15 points.

A greater-than-average ratio of problem assets of 48.00 percent in our test was something to keep an eye on for N A R C.

Earnings score

A credit union's profitability affects its safety and soundness. Earnings may be retained by the credit union, increasing its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

N A R C scored 0 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.31.

One sign that N A R C is performing behind its peers in this area was its earnings ratio of -192.00 percent in our test, worse 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.