Safe and Sound

NORTH STAR COMMUNITY

MADDOCK, ND
4
Star Rating
NORTH STAR COMMUNITY is a MADDOCK, ND-based, NCUA-insured credit union that opened its doors in 1940. The credit union has assets of $306.2 million, according to December 31, 2017, regulatory filings.

With 77 full-time employees, the credit union holds loans and leases worth $239.1 million. NORTH STAR COMMUNITY's 22,407 members currently have $257.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTH STAR COMMUNITY exhibited a good condition, earning 4 out of 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 American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, more capital is preferred.

NORTH STAR COMMUNITY fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 14 out of a possible 30 points.

NORTH STAR COMMUNITY appears to be weaker than its peers in this area, with a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions.

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 mortgages.

Having large numbers of these types of assets may eventually force a credit union to use capital to cover losses, diminishing 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 interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, NORTH STAR COMMUNITY scored 40 out of a possible 40 points, beating the national average of 38.09 points.

The credit union's ratio of troubled assets was 0.00 percent in our test, less than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, are less able to do those things.

NORTH STAR COMMUNITY fell behind the national average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One indication that NORTH STAR COMMUNITY is beating 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.