Safe and Sound

NORTHWEST COMMUNITY

MORTON GROVE, IL
3
Star Rating
MORTON GROVE, IL-based NORTHWEST COMMUNITY is an NCUA-insured credit union founded in 1939. The credit union holds assets of $56.9 million, according to December 31, 2017, regulatory filings.

Members have $37.3 million on deposit tended by 9 full-time employees. With that footprint, the credit union holds loans and leases worth $37.3 million. Its 2,851 members currently have $50.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHWEST COMMUNITY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members when a credit union is experiencing economic trouble. It follows then that when it comes to measuring an an institution's financial stability, capital is crucial. When looking at safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, NORTHWEST COMMUNITY received a score of 12 out of a possible 30 points, less than the national average of 15.65.

NORTHWEST COMMUNITY 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

This test is intended to estimate how the credit union's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due loans.

Having a large number of these types of assets means a credit union may eventually have to use capital to cover losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a future failure.

NORTHWEST COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

Troubled assets made up 0.00 percent of NORTHWEST COMMUNITY's total assets in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. Earnings may be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Conversely, losses reduce a credit union's ability to do those things.

NORTHWEST COMMUNITY scored 0 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

One sign that NORTHWEST COMMUNITY is outperforming 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.