Safe and Sound

LAN-FAIR

LANCASTER, OH
4
Star Rating
LAN-FAIR is an NCUA-insured credit union founded in 1966 and currently based in LANCASTER, OH. Regulatory filings show the credit union having $54.2 million in assets, as of December 31, 2017.

Thanks to the efforts of 6 full-time employees, the credit union holds loans and leases worth $11.5 million. Its 4,745 members currently have $47.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LAN-FAIR exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three major criteria Bankrate used to grade American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial stability, capital is crucial. It acts as a bulwark against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, LAN-FAIR received a score of 14 out of a possible 30 points, coming in below the national average of 15.65.

LAN-FAIR's capitalization ratio of 14.00 percent in our test was lower than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

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

A credit union with a large number of these types of assets may eventually be forced to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a failure in the future.

LAN-FAIR came in below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A lower-than-average ratio of problem 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 making money has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or use them to address problematic loans, potentially making the credit union better able to withstand economic shocks. Credit unions that are losing money, however, have less ability to do those things.

LAN-FAIR underperformed the average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One sign that LAN-FAIR 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.