Safe and Sound

LAKE MICHIGAN

GRAND RAPIDS, MI
5
Star Rating
LAKE MICHIGAN is an NCUA-insured credit union started in 1933 and currently based in GRAND RAPIDS, MI. As of December 31, 2017, the credit union held assets of $5.22 billion.

Thanks to the work of 1,111 full-time employees, the credit union holds loans and leases worth $3.97 billion. LAKE MICHIGAN's 320,504 members currently have $4.14 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LAKE MICHIGAN exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an an institution's financial resilience, capital is essential. When it comes to safety and soundness, the more capital, the better.

LAKE MICHIGAN exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, racking up 16 out of a possible 30 points.

LAKE MICHIGAN's capitalization ratio of 16.00 percent in our test puts it right in line with the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate 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 a large number of these types of assets could eventually be required to use capital to cover losses, shrinking its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, diminishing earnings and elevating the chances of a failure in the future.

On Bankrate's test of asset quality, LAKE MICHIGAN scored 40 out of a possible 40 points, above the national average of 38.09 points.

Troubled assets made up 0.00 percent of LAKE MICHIGAN's total assets in our test, lower than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn 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, potentially making the credit union better prepared to withstand financial shocks. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, LAKE MICHIGAN scored 22 out of a possible 30, above the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's outperforming its peers in this area.

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.