Safe and Sound

NORTHWOODS COMMUNITY

PARK FALLS, WI
4
Star Rating
NORTHWOODS COMMUNITY is a PARK FALLS, WI-based, NCUA-insured credit union started in 1953. Regulatory filings show the credit union having assets of $70.6 million, as of December 31, 2017.

Thanks to the efforts of 25 full-time employees, the credit union currently holds loans and leases worth $46.0 million. Its 8,532 members currently have $62.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHWOODS COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

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

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

NORTHWOODS 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, below the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these kinds of assets could eventually require a credit union to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

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

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

A credit union's profitability has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

NORTHWOODS COMMUNITY fell short of the national average on Bankrate's earnings test, achieving a score of 10 out of a possible 30.

One sign that NORTHWOODS COMMUNITY is running ahead of 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.