WHAT IS
SAFE AND SOUND?
When it comes to measuring an institution's financial strength, capital is useful. It works as a cushion against losses and affords protection for members when a credit union is struggling financially. When looking at safety and soundness, the higher the capital, the better.
LEWIS CLARK received a score of 8 out of a possible 30 points on our test to measure capital adequacy, less than the national average of 15.65.
LEWIS CLARK appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions.
Bankrate uses this test to estimate 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.
A credit union with a large number of these kinds of assets may eventually have to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and increasing the chances of a future failure.
LEWIS CLARK scored above the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .
A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.
How successful a credit union is at earning money affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money have less ability to do those things.
LEWIS CLARK outperformed the average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.
One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, better than the average for all credit unions.
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.
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.