Safe and Sound

TERMINALS

CARTERET, NJ
4
Star Rating
CARTERET, NJ-based TERMINALS is an NCUA-insured credit union founded in 1967. The credit union has assets of $893,243, according to December 31, 2017, regulatory filings.

Its 105 members currently have $617,910 in shares with the credit union. With that footprint, the credit union holds loans and leases worth $643,529.

Overall, Bankrate believes that, as of December 31, 2017, TERMINALS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did 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 buffer against losses and affords protection for members during periods of economic trouble for the credit union. Therefore, a credit union's level of capital is a valuable measurement of its financial strength. When looking at safety and soundness, more capital is better.

On our test to measure capital adequacy, TERMINALS racked up 30 out of a possible 30 points, beating out the national average of 15.65.

TERMINALS had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, an indication that it could be more resilient in a crisis than its peers.

Asset Quality Score

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

A credit union with a large number of these types of assets could eventually be required to use capital to absorb losses, reducing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, TERMINALS scored 32 out of a possible 40 points, falling short of the national average of 38.09 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 has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand economic trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

TERMINALS fell behind the national average on Bankrate's earnings test, achieving a score of 4 out of a possible 30.

One indication that the credit union 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.