Safe and Sound

PROPONENT

NUTLEY, NJ
2
Star Rating
PROPONENT is a NUTLEY, NJ-based, NCUA-insured credit union started in 1971. Regulatory filings show the credit union having $498.7 million in assets, as of December 31, 2017.

Members have $361.0 million on deposit tended by 81 full-time employees. With that footprint, the credit union holds loans and leases worth $361.0 million. PROPONENT's 25,589 members currently have $439.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PROPONENT exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's an analysis of 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 is a valuable measurement of a credit union's financial fortitude. It acts as a cushion against losses and as protection for members during periods of financial trouble for the credit union. When it comes to safety and soundness, the more capital, the better.

PROPONENT received a score of 14 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

PROPONENT appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

Having a large number of these types of assets means a credit union could eventually have 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 interest for the credit union, reducing earnings and elevating the risk of a failure in the future.

PROPONENT scored 32 out of a possible 40 points on Bankrate's asset quality test, failing to reach the national average of 38.09.

Troubled assets made up 0.00 percent of PROPONENT's total assets in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

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

PROPONENT scored 0 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.