Safe and Sound

LORMET COMMUNITY

Amherst, OH
4
Star Rating
LORMET COMMUNITY is an NCUA-insured credit union founded in 1936 and currently headquartered in Amherst, OH. The credit union has assets of $158.2 million, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 33 full-time employees, the credit union holds loans and leases worth $107.3 million. Its 18,778 members currently have $140.5 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, LORMET COMMUNITY exhibited a good condition, earning 4 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 evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members during times of financial trouble for the credit union. It follows then that a credit union's level of capital is a crucial measurement of its financial strength. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, LORMET COMMUNITY received a score of 12 out of a possible 30 points, coming in below the national average of 15.26.

LORMET COMMUNITY's capitalization ratio of 11.00 percent in our test was lower than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with large numbers of these kinds of assets may eventually have to use capital to cover losses, shrinking its equity buffer. 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 diminished earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, LORMET COMMUNITY scored 40 out of a possible 40 points, beating the national average of 38.15 points.

The credit union's ratio of troubled assets was 1.00 percent in our test, below the national average and potentially indicative of greater financial strength than 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, boosting its capital cushion, or be used to address problematic loans, potentially making the credit union better able to withstand financial trouble. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's earnings test, LORMET COMMUNITY scored 8 out of a possible 30, falling short of the national average of 10.31.

One sign that LORMET COMMUNITY is doing better than its peers in this area was its earnings ratio of 3.00 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.