Safe and Sound

LATINO COMMUNITY

DURHAM, NC
5
Star Rating
LATINO COMMUNITY is a DURHAM, NC-based, NCUA-insured credit union started in 2000. Regulatory filings show the credit union having assets of $276.8 million, as of December 31, 2017.

Members have $252.4 million on deposit tended by 109 full-time employees. With that footprint, the credit union has amassed loans and leases worth $252.4 million. LATINO COMMUNITY's 74,941 members currently have $221.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LATINO COMMUNITY exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three major criteria Bankrate used to grade U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and affords protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a key measurement of its financial fortitude. From a safety and soundness perspective, more capital is better.

LATINO COMMUNITY fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

LATINO COMMUNITY appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 14.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with lots of these types of assets may eventually be required to use capital to cover losses, reducing its equity cushion. 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 increasing the risk of a failure in the future.

LATINO COMMUNITY scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

Troubled assets made up 0.00 percent of LATINO COMMUNITY's total assets in our test, less than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital buffer, or be used to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Conversely, losses diminish a credit union's ability to do those things.

On Bankrate's earnings test, LATINO COMMUNITY scored 24 out of a possible 30, beating the national average of 10.11.

LATINO COMMUNITY had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting 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.