Safe and Sound

LINCOLN PARK COMMUNITY

LINCOLN PARK, MI
4
Star Rating
LINCOLN PARK, MI-based LINCOLN PARK COMMUNITY is an NCUA-insured credit union founded in 1936. Regulatory filings show the credit union having assets of $53.8 million, as of December 31, 2017.

Thanks to the efforts of 11 full-time employees, the credit union currently holds loans and leases worth $8.8 million. LINCOLN PARK COMMUNITY's 3,879 members currently have $45.1 million in shares with the credit union.

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

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is essential. It acts as a bulwark against losses and as protection for members when a credit union is struggling financially. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, LINCOLN PARK COMMUNITY racked up 22 out of a possible 30 points, above the national average of 15.65.

LINCOLN PARK COMMUNITY's capitalization ratio of 22.00 percent in our test was higher than the average for all credit unions, an indication that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is to try to understand 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 extensive holdings of these types of assets could eventually be required to use capital to absorb losses, shrinking its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, reducing earnings and elevating the chances of a failure in the future.

LINCOLN PARK COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 38.09.

LINCOLN PARK COMMUNITY's ratio of problem assets was 0.00 percent in our test, lower than the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, likely making the credit union better able to withstand financial shocks. Obviously, credit unions that are losing money have less ability to do those things.

LINCOLN PARK COMMUNITY scored 0 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

One sign that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.