Safe and Sound

NORTHAMPTON V.A.F.

Leeds, MA
4
Star Rating
NORTHAMPTON V.A.F. is an NCUA-insured credit union started in 1935 and currently based in Leeds, MA. As of December 31, 2017, the credit union held assets of $7.5 million.

Its 892 members currently have $6.5 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $2.7 million.

Overall, Bankrate believes that, as of December 31, 2017, NORTHAMPTON V.A.F. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to score U.S. credit unions.

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SAFE AND SOUND?

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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 stability, capital is useful. When looking at safety and soundness, the higher the capital, the better.

NORTHAMPTON V.A.F. achieved a score of 18 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 15.65.

NORTHAMPTON V.A.F. appears to be on more solid financial footing than its peers, with a capitalization ratio of 18.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

A credit union with large numbers of these kinds of assets could eventually be required to use capital to cover losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.

NORTHAMPTON V.A.F. scored above the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

NORTHAMPTON V.A.F.'s ratio of problem assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the credit union better able to withstand economic shocks. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's test of earnings, NORTHAMPTON V.A.F. scored 8 out of a possible 30, failing to reach the national average of 10.11.

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