Safe and Sound

NORTHWEST CONSUMERS

TRAVERSE CITY, MI
4
Star Rating
Founded in 1952, NORTHWEST CONSUMERS is an NCUA-insured credit union based in TRAVERSE CITY, MI. As of December 31, 2017, the credit union held assets of $19.7 million.

With 7 full-time employees, the credit union has amassed loans and leases worth $14.4 million. Its 2,709 members currently have $17.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHWEST CONSUMERS 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 major criteria Bankrate used to evaluate American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. It follows then that when it comes to measuring an a credit union's financial resilience, capital is essential. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, NORTHWEST CONSUMERS received a score of 14 out of a possible 30 points, coming in below the national average of 15.65.

NORTHWEST CONSUMERS had a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

Having extensive holdings of these types of assets could eventually require a credit union 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 thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, NORTHWEST CONSUMERS scored 36 out of a possible 40 points, coming in below the national average of 38.09 points.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

NORTHWEST CONSUMERS beat the national average on Bankrate's earnings test, achieving a score of 12 out of a possible 30.

One indication that NORTHWEST CONSUMERS is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, better 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.