Safe and Sound

LANAI

Lanai City, HI
4
Star Rating
Lanai City, HI-based LANAI is an NCUA-insured credit union started in 1938. The credit union has $27.8 million in assets, according to December 31, 2017, regulatory filings.

Members have $1.2 million on deposit tended by 3 full-time employees. With that footprint, the credit union holds loans and leases worth $1.2 million. LANAI's 1,807 members currently have $24.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LANAI exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three major criteria Bankrate used to score U.S. credit unions.

WHAT IS
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 key. It acts as a buffer against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

LANAI finished below the national average of 15.65 on our test to measure capital adequacy, scoring 14 out of a possible 30 points.

LANAI's capitalization ratio of 14.00 percent in our test was below the average for all credit unions, suggesting that it could be less resilient in a crisis than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as unpaid mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having large numbers of these kinds of assets suggests a credit union could have to use capital to absorb losses, cutting down on its buffer 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, pushing down earnings and increasing the risk of a future failure.

LANAI scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better prepared to withstand economic shocks. However, credit unions that are losing money have less ability to do those things.

LANAI scored 4 out of a possible 30 on Bankrate's test of earnings, less than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.