Safe and Sound

N.W. IOWA

Le Mars, IA
5
Star Rating
N.W. IOWA is a Le Mars, IA-based, NCUA-insured credit union founded in 1966. The credit union holds assets of $47.3 million, according to December 31, 2017, regulatory filings.

Members have $31.9 million on deposit tended by 10 full-time employees. With that footprint, the credit union currently holds loans and leases worth $31.9 million. N.W. IOWA's 4,864 members currently have $41.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, N.W. IOWA exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during periods of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial resilience, capital is valuable. From a safety and soundness perspective, the higher the capital, the better.

N.W. IOWA racked up 16 out of a possible 30 points on our test to measure capital adequacy, better than the national average of 15.65.

N.W. IOWA had a capitalization ratio of 16.00 percent in our test, the same as the average for all credit unions, suggesting that it's running neck and neck with its peers.

Asset Quality Score

This test is intended to try to understand 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 loans.

A credit union with a large number of these types of assets may eventually be forced to use capital to absorb losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, reducing earnings and increasing the risk of a failure in the future.

N.W. IOWA scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

N.W. IOWA received above-average marks on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One indication that N.W. IOWA 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.