Safe and Sound

NAVY FEDERAL CREDIT UNION

VIENNA, VA
5
Star Rating
NAVY FEDERAL CREDIT UNION is a VIENNA, VA-based, NCUA-insured credit union that opened its doors in 1947. Regulatory filings show the credit union having assets of $90.57 billion, as of December 31, 2017.

With 14,829 full-time employees, the credit union has amassed loans and leases worth $65.88 billion. Its 7,542,010 members currently have $62.86 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NAVY FEDERAL CREDIT UNION exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American 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 as protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial resilience, capital is useful. When it comes to safety and soundness, the higher the capital, the better.

NAVY FEDERAL CREDIT UNION received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

NAVY FEDERAL CREDIT UNION's capitalization ratio of 14.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these types of assets suggests a credit union may eventually 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 no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

NAVY FEDERAL CREDIT UNION scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 38.09.

NAVY FEDERAL CREDIT UNION's ratio of problem assets was 0.00 percent in our test, beneath the national average and potentially indicative of greater financial strength than 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 deal with problematic loans, likely making the credit union better able to withstand economic trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

NAVY FEDERAL CREDIT UNION scored 22 out of a possible 30 on Bankrate's test of earnings, exceeding the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's running ahead of 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.