Safe and Sound

PATERSON POLICE

Paterson, NJ
5
Star Rating
Paterson, NJ-based PATERSON POLICE is an NCUA-insured credit union founded in 1953. Regulatory filings show the credit union having $5.3 million in assets, as of December 31, 2017.

The credit union currently holds loans and leases worth $1.3 million. PATERSON POLICE's 712 members currently have $4.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PATERSON POLICE exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is key. It works as a buffer against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, more capital is better.

On our test to measure capital adequacy, PATERSON POLICE achieved a score of 24 out of a possible 30 points, above the national average of 15.65.

PATERSON POLICE appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 24.00 percent in our test, above the average for all credit unions.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by troubled assets, such as unpaid loans.

A credit union with large numbers of these kinds of assets could eventually have to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a future failure.

PATERSON POLICE beat out the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

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

Earnings score

A credit union's ability to earn money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Losses, on the other hand, take away from a credit union's ability to do those things.

PATERSON POLICE received below-average marks on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

PATERSON POLICE had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's outperforming 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.