Safe and Sound

UNITED NEIGHBORS

WATERTOWN, NY
3
Star Rating
UNITED NEIGHBORS is a WATERTOWN, NY-based, NCUA-insured credit union started in 1954. Regulatory filings show the credit union having assets of $6.1 million, as of December 31, 2017.

With 3 full-time employees, the credit union holds loans and leases worth $3.6 million. UNITED NEIGHBORS's 1,190 members currently have $4.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, UNITED NEIGHBORS exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

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

On our test to measure capital adequacy, UNITED NEIGHBORS received a score of 12 out of a possible 30 points, coming in below the national average of 15.65.

UNITED NEIGHBORS 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 estimate the effect of problem assets, such as past-due loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with extensive holdings of these kinds of assets may eventually be required to use capital to absorb losses, reducing its cushion 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.

UNITED NEIGHBORS scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

A lower-than-average ratio of problem 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. Earnings can be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses take away from a credit union's ability to do those things.

On Bankrate's earnings test, UNITED NEIGHBORS scored 0 out of a possible 30, lower than the national average of 10.11.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.