Safe and Sound

L G & W

MEMPHIS, TN
5
Star Rating
L G & W is a MEMPHIS, TN-based, NCUA-insured credit union dating back to 1940. The credit union holds assets of $91.1 million, according to December 31, 2017, regulatory filings.

With 14 full-time employees, the credit union holds loans and leases worth $31.2 million. L G & W's 5,491 members currently have $71.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, L G & W exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to evaluate 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 affords protection for members during times of financial trouble for the credit union. Therefore, a credit union's level of capital is an important measurement of its financial resilience. When looking at safety and soundness, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, L G & W racked up 30 out of a possible 30 points, beating the national average of 15.65.

L G & W had a capitalization ratio of 30.00 percent in our test, above the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

A credit union with extensive holdings of these kinds of assets could eventually be required to use capital to cover losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, resulting in depressed earnings and potentially more risk of a failure in the future.

L G & W scored 40 out of a possible 40 points on Bankrate's asset quality test, above the national average of 38.09.

L G & W's ratio of problem assets was 0.00 percent in our test, lower than the national average and suggestive 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. A credit union can retain its earnings, giving a boost to its capital buffer, or put them to work addressing 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, L G & W scored 8 out of a possible 30, coming in below the national average of 10.11.

One sign that L G & W is beating its peers in this area was its earnings ratio of 0.00 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.