Safe and Sound

LATINO COMMUNITY

DURHAM, NC
5
Star Rating
Started in 2000, LATINO COMMUNITY is an NCUA-insured credit union based in DURHAM, NC. As of June 30, 2017, the credit union had assets of $256.2 million.

With 97 full-time employees, the credit union currently holds loans and leases worth $226.2 million. LATINO COMMUNITY's 68,652 members currently have $208.0 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, LATINO COMMUNITY exhibited a superior condition, earning a full 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 U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a credit union's financial fortitude. It works as a buffer against losses and as protection for members during periods of economic trouble for the credit union. When looking at safety and soundness, more capital is better.

LATINO COMMUNITY fell short of the national average of 15.26 on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

LATINO COMMUNITY 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, less than the average for all credit unions.

Asset Quality Score

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

Having extensive holdings of these types of assets could eventually require a credit union to use capital to cover losses, decreasing its buffer of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a future failure.

On Bankrate's asset quality test, LATINO COMMUNITY scored 36 out of a possible 40 points, lower than the national average of 38.15 points.

LATINO COMMUNITY's ratio of troubled assets was 9.00 percent in our test, higher than the national average and something to watch.

Earnings score

How successful a credit union is at earning money affects its long-term survivability. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's earnings test, LATINO COMMUNITY scored 24 out of a possible 30, exceeding the national average of 10.31.

One sign that the credit union is outperforming its peers in this area was its earnings ratio of 15.00 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.