Safe and Sound

L'OREAL USA

Mountainside, NJ
5
Star Rating
L'OREAL USA is a Mountainside, NJ-based, NCUA-insured credit union started in 1972. Regulatory filings show the credit union having assets of $26.8 million, as of December 31, 2017.

Thanks to the work of 4 full-time employees, the credit union currently holds loans and leases worth $12.8 million. Its 3,668 members currently have $21.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, L'OREAL USA exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the credit union did on the three major criteria Bankrate used to score 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 a credit union's financial fortitude, capital is essential. It works as a cushion against losses and affords protection for members during periods of economic instability for the credit union. When looking at safety and soundness, the higher the capital, the better.

L'OREAL USA racked up 30 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 15.65.

L'OREAL USA appears to be more resilient than its peers, with a capitalization ratio of 30.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

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

A credit union with extensive holdings of these types of assets may eventually be forced to use capital to absorb losses, reducing its cushion of equity. 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 lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, L'OREAL USA scored 40 out of a possible 40 points, better than the national average of 38.09 points.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money have less ability to do those things.

L'OREAL USA received below-average marks on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 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.