Safe and Sound

LANAI

Lanai City, HI
4
Star Rating
LANAI is a Lanai City, HI-based, NCUA-insured credit union that opened its doors in 1938. As of June 30, 2017, the credit union held assets of $27.4 million.

Members have $1.2 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $1.2 million. Its 1,831 members currently have $24.2 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, LANAI exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members during times of financial trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial stability, capital is crucial. From a safety and soundness perspective, more capital is preferred.

LANAI scored below the national average of 15.26 on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

LANAI had a capitalization ratio of 12.00 percent in our test, worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

Having lots of these kinds of assets may eventually require a credit union to use capital to absorb losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and increasing the chances of a future failure.

LANAI scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.15.

A below-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 safety and soundness. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, diminish a credit union's ability to do those things.

LANAI underperformed the average on Bankrate's test of earnings, achieving a score of 4 out of a possible 30.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 2.00 percent in our test, better 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.