Safe and Sound

NORTHERN SKIES

Anchorage, AK
4
Star Rating
NORTHERN SKIES is an Anchorage, AK-based, NCUA-insured credit union started in 1967. As of December 31, 2017, the credit union held assets of $118.0 million.

With 40 full-time employees, the credit union holds loans and leases worth $91.3 million. Its 8,601 members currently have $86.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHERN SKIES exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of 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 buffer against losses and provides protection for members during periods of financial trouble for the credit union. Therefore, when it comes to measuring an a credit union's financial fortitude, capital is important. When it comes to safety and soundness, the more capital, the better.

NORTHERN SKIES received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, below the national average of 15.65.

NORTHERN SKIES appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the effect of problem assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having lots of these kinds of assets suggests a credit union may eventually have to use capital to cover losses, diminishing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, pushing down earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, NORTHERN SKIES scored 36 out of a possible 40 points, coming in below the national average of 38.09 points.

NORTHERN SKIES's ratio of problem assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. Earnings may be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.

NORTHERN SKIES outperformed the average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

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.