Safe and Sound

NEWPORT NEWS MUN. EMP CREDIT UNION

Newport News, VA
2
Star Rating
NEWPORT NEWS MUN. EMP CREDIT UNION is an NCUA-insured credit union founded in 1950 and currently based in Newport News, VA. The credit union has $40.3 million in assets, according to December 31, 2017, regulatory filings.

With 12 full-time employees, the credit union holds loans and leases worth $24.2 million. NEWPORT NEWS MUN. EMP CREDIT UNION's 5,061 members currently have $36.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NEWPORT NEWS MUN. EMP CREDIT UNION exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial resilience, capital is essential. When looking at safety and soundness, the more capital, the better.

NEWPORT NEWS MUN. EMP CREDIT UNION fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 8 out of a possible 30 points.

NEWPORT NEWS MUN. EMP CREDIT UNION's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these kinds of assets may eventually force a credit union to use capital to absorb losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, NEWPORT NEWS MUN. EMP CREDIT UNION scored 36 out of a possible 40 points, below the national average of 38.09 points.

A lower-than-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 affects its safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

NEWPORT NEWS MUN. EMP CREDIT UNION scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 10.11.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.