Safe and Sound

NORTHERN

WATERTOWN, NY
4
Star Rating
WATERTOWN, NY-based NORTHERN is an NCUA-insured credit union founded in 1955. As of December 31, 2017, the credit union had assets of $239.2 million.

Thanks to the work of 96 full-time employees, the credit union holds loans and leases worth $214.8 million. Its 29,829 members currently have $211.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHERN exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial fortitude. It acts as a cushion against losses and as protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

NORTHERN fell below the national average of 15.65 on our test to measure capital adequacy, racking up 6 out of a possible 30 points.

NORTHERN appears to be weaker than its peers in this area, with a capitalization ratio of 6.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

A credit union with extensive holdings of these types of assets may eventually be required to use capital to cover losses, decreasing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, reducing earnings and increasing the chances of a future failure.

NORTHERN scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.09.

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, NORTHERN scored 14 out of a possible 30, beating out the national average of 10.11.

One sign that NORTHERN is outperforming its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.