Safe and Sound

L R F D

LITTLE ROCK, AR
5
Star Rating
LITTLE ROCK, AR-based L R F D is an NCUA-insured credit union founded in 1950. Regulatory filings show the credit union having assets of $12.1 million, as of December 31, 2017.

The credit union has amassed loans and leases worth $8.1 million. L R F D's 746 members currently have $9.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, L R F D exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three key criteria Bankrate used to score American credit unions on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a valuable measurement of a credit union's financial strength. It acts as a buffer against losses and as protection for members during periods of economic trouble for the credit union. When it comes to safety and soundness, more capital is preferred.

On our test to measure the adequacy of a credit union's capital, L R F D racked up 28 out of a possible 30 points, above the national average of 15.65.

L R F D had a capitalization ratio of 28.00 percent in our test, above the average for all credit unions, a sign that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these types of assets may eventually be required 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 no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a failure in the future.

L R F D scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.

A lower-than-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

How successful a credit union is at earning money has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union more resilient in times of trouble. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's earnings test, L R F D scored 14 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, 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.