WHAT IS
SAFE AND SOUND?
Capital works as a cushion against losses and provides protection for members when a credit union is experiencing economic instability. Therefore, when it comes to measuring an a credit union's financial stability, capital is crucial. When looking at safety and soundness, the higher the capital, the better.
UNITED NORTHWEST achieved a score of 22 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 15.65.
UNITED NORTHWEST appears to be on more solid financial footing than its peers, with a capitalization ratio of 22.00 percent in our test, above the average for all credit unions.
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 past-due mortgages.
A credit union with a large number of these types of assets could eventually be required to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.
UNITED NORTHWEST did better than 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, lower than the national average and potentially indicative of greater financial strength than other credit unions.
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 better prepared to withstand economic trouble. Conversely, losses diminish a credit union's ability to do those things.
UNITED NORTHWEST scored 8 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 10.11.
One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above the average for all credit unions.
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.
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.