Safe and Sound

NORTHLAND AREA

OSCODA, MI
4
Star Rating
NORTHLAND AREA is an NCUA-insured credit union started in 1957 and currently headquartered in OSCODA, MI. Regulatory filings show the credit union having assets of $375.4 million, as of December 31, 2017.

Members have $295.4 million on deposit tended by 117 full-time employees. With that footprint, the credit union has amassed loans and leases worth $295.4 million. Its 45,163 members currently have $314.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHLAND AREA 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 grade American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an an institution's financial stability, capital is key. When it comes to safety and soundness, the more capital, the better.

NORTHLAND AREA received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, falling short of the national average of 15.65.

NORTHLAND AREA's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

A credit union with a large number of these kinds of assets could eventually be forced to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a failure in the future.

NORTHLAND AREA did better than the national average of 38.09 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

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

Earnings score

How successful a credit union is at making money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

NORTHLAND AREA scored 16 out of a possible 30 on Bankrate's earnings test, beating the national average of 10.11.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.