Safe and Sound

WAKEFERN

Elizabeth, NJ
5
Star Rating
WAKEFERN is an NCUA-insured credit union started in 1962 and currently headquartered in Elizabeth, NJ. As of December 31, 2017, the credit union held assets of $9.7 million.

Members have $1.4 million on deposit tended by 2 full-time employees. With that footprint, the credit union has amassed loans and leases worth $1.4 million. Its 1,359 members currently have $7.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, WAKEFERN exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and as protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is a key measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

WAKEFERN beat out the national average of 15.65 points on our test to measure capital adequacy, racking up 30 out of a possible 30 points.

WAKEFERN's capitalization ratio of 30.00 percent in our test was above the average for all credit unions, an indication that it's stronger than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due loans.

A credit union with lots of these types of assets may eventually be required to use capital to cover losses, shrinking 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 money, resulting in lower earnings and potentially more risk of a failure in the future.

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

Troubled assets made up 0.00 percent of WAKEFERN's total assets in our test, beneath the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, potentially making the credit union better able to withstand economic trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

WAKEFERN scored 4 out of a possible 30 on Bankrate's earnings test, below the national average of 10.11.

One indication that the credit union is outperforming 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.