Safe and Sound

LM

BALTIMORE, MD
4
Star Rating
Founded in 1949, LM is an NCUA-insured credit union headquartered in BALTIMORE, MD. Regulatory filings show the credit union having $38.8 million in assets, as of December 31, 2017.

Thanks to the efforts of 8 full-time employees, the credit union currently holds loans and leases worth $27.5 million. LM's 3,578 members currently have $35.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LM exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is useful. It works as a bulwark against losses and affords protection for members during times of financial instability for the credit union. When looking at safety and soundness, more capital is better.

On our test to measure capital adequacy, LM received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

LM's capitalization ratio of 8.00 percent in our test was lower than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test's purpose is to estimate 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 lots of these kinds of assets could eventually be required to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, LM scored 40 out of a possible 40 points, beating the national average of 38.09 points.

The credit union'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

A credit union's profitability has an effect on its safety and soundness. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better able to withstand economic trouble. Obviously, credit unions that are losing money have less ability to do those things.

LM received below-average marks on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

One indication that LM 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.

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.