Safe and Sound

NW PREFERRED

TIGARD, OR
4
Star Rating
NW PREFERRED is an NCUA-insured credit union founded in 1940 and currently headquartered in Tigard, OR. As of December 31, 2017, the credit union held assets of $123.9 million.

Members have $97.6 million on deposit tended by 33 full-time employees. With that footprint, the credit union holds loans and leases worth $97.6 million. NW PREFERRED's 8,996 members currently have $110.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NW PREFERRED exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for members during periods of economic trouble for the credit union. It follows then that when it comes to measuring an an institution's financial resilience, capital is important. From a safety and soundness perspective, the higher the capital, the better.

NW PREFERRED scored below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 10 out of a possible 30 points.

NW PREFERRED appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

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

NW PREFERRED 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 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 making money affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money have less ability to do those things.

NW PREFERRED outperformed the average on Bankrate's earnings test, achieving a score of 18 out of a possible 30.

NW PREFERRED had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's doing better than its peers in this area.

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.