Safe and Sound

NORTHERN VALLEY

GRAND FORKS, ND
3
Star Rating
GRAND FORKS, ND-based NORTHERN VALLEY is an NCUA-insured credit union started in 1936. Regulatory filings show the credit union having $14.8 million in assets, as of December 31, 2017.

With 3 full-time employees, the credit union has amassed loans and leases worth $9.1 million. Its 1,475 members currently have $13.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHERN VALLEY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's 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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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial strength, capital is valuable. It acts as a cushion against losses and provides protection for members when a credit union is experiencing economic trouble. When looking at safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, NORTHERN VALLEY received a score of 12 out of a possible 30 points, below the national average of 15.65.

NORTHERN VALLEY's capitalization ratio of 12.00 percent in our test was lower than the average for all credit unions, an indication that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets suggests a credit union could have to use capital to absorb 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 lower earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, NORTHERN VALLEY scored 40 out of a possible 40 points, better than the national average of 38.09 points.

Troubled assets made up 0.00 percent of NORTHERN VALLEY's total assets in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

NORTHERN VALLEY received below-average marks on Bankrate's earnings test, achieving a score of 0 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 beating 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.