Safe and Sound

NORTHERN TIER

Minot, ND
2
Star Rating
Started in 1959, NORTHERN TIER is an NCUA-insured credit union headquartered in Minot, ND. Regulatory filings show the credit union having $125.0 million in assets, as of June 30, 2017.

Thanks to the work of 32 full-time employees, the credit union holds loans and leases worth $93.9 million. NORTHERN TIER's 12,613 members currently have $110.7 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, NORTHERN TIER exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key criteria Bankrate used to evaluate American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of an institution's financial resilience. It acts as a cushion against losses and provides protection for members during times of economic instability for the credit union. When looking at safety and soundness, more capital is better.

NORTHERN TIER received a score of 8 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.26.

NORTHERN TIER appears to be weaker than its peers in this area, with a capitalization ratio of 9.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these kinds of assets could eventually be forced to use capital to cover losses, decreasing 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 depressed earnings and potentially more risk of a failure in the future.

On Bankrate's test of asset quality, NORTHERN TIER scored 36 out of a possible 40 points, failing to reach the national average of 38.15 points.

A higher-than-average ratio of troubled assets of 9.00 percent in our test was a potential area of concern for the credit union.

Earnings score

A credit union's ability to earn money has an effect on 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 more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's earnings test, NORTHERN TIER scored 0 out of a possible 30, less than the national average of 10.31.

One sign that NORTHERN TIER is lagging behind its peers in this area was its earnings ratio of -1.00 percent in our test, lower 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.