Safe and Sound

L & N

LOUISVILLE, KY
5
Star Rating
LOUISVILLE, KY-based L & N is an NCUA-insured credit union founded in 1954. The credit union holds $1.15 billion in assets, according to December 31, 2017, regulatory filings.

Members have $836.1 million on deposit tended by 238 full-time employees. With that footprint, the credit union has amassed loans and leases worth $836.1 million. Its 85,211 members currently have $1.01 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, L & N exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three key 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

When it comes to measuring an institution's financial fortitude, capital is valuable. It works as a buffer against losses and provides protection for members during times of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, L & N received a score of 12 out of a possible 30 points, lower than the national average of 15.65.

L & N's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as past-due mortgages.

A credit union with lots of these types of assets could eventually have to use capital to cover losses, reducing 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 lower earnings and potentially more risk of a failure in the future.

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

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

A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's test of earnings, L & N scored 18 out of a possible 30, exceeding the national average of 10.11.

One sign that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.