Safe and Sound

LEXINGTON MA

LEXINGTON, MA
3
Star Rating
LEXINGTON MA is a LEXINGTON, MA-based, NCUA-insured credit union that opened its doors in 1961. Regulatory filings show the credit union having assets of $11.2 million, as of December 31, 2017.

Members have $5.9 million on deposit tended by 2 full-time employees. With that footprint, the credit union has amassed loans and leases worth $5.9 million. LEXINGTON MA's 1,213 members currently have $10.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LEXINGTON MA exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a credit union's financial strength. It works as a buffer against losses and provides protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, LEXINGTON MA received a score of 10 out of a possible 30 points, coming in below the national average of 15.65.

LEXINGTON MA's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

A credit union with a large number of these types of assets may eventually be forced to use capital to cover losses, reducing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the risk of a failure in the future.

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

LEXINGTON MA's ratio of troubled assets was 0.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to address problematic loans, likely making the credit union more resilient in tough times. Conversely, losses diminish a credit union's ability to do those things.

LEXINGTON MA scored 0 out of a possible 30 on Bankrate's earnings test, lower than the national average of 10.11.

LEXINGTON MA 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.