Safe and Sound

NORTHWEST

Herndon, VA
4
Star Rating
Founded in 1947, NORTHWEST is an NCUA-insured credit union headquartered in Herndon, VA. As of December 31, 2017, the credit union had assets of $3.40 billion.

With 512 full-time employees, the credit union has amassed loans and leases worth $2.56 billion. Its 253,529 members currently have $2.85 billion in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an a credit union's financial strength, capital is crucial. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, NORTHWEST received a score of 10 out of a possible 30 points, coming in below the national average of 15.65.

NORTHWEST's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem 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 could eventually have to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a future failure.

NORTHWEST scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

A below-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 has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in tough times. Conversely, losses diminish a credit union's ability to do those things.

NORTHWEST beat the national average on Bankrate's test of earnings, achieving a score of 14 out of a possible 30.

One sign that the credit union is beating 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.