Safe and Sound

LOCAL #673

Mentor, OH
5
Star Rating
LOCAL #673 is a Mentor, OH-based, NCUA-insured credit union dating back to 1960. The credit union has assets of $1.8 million, according to December 31, 2017, regulatory filings.

The credit union holds loans and leases worth $1.0 million. Its 470 members currently have $1.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LOCAL #673 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 important criteria Bankrate used to score U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is a useful measurement of its financial strength. From a safety and soundness perspective, more capital is better.

LOCAL #673 racked up 20 out of a possible 30 points on our test to measure capital adequacy, beating out the national average of 15.65.

LOCAL #673 had a capitalization ratio of 20.00 percent in our test, higher than the average for all credit unions, a sign that it's stronger than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

Having large numbers of these types of assets may eventually force a credit union to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning money, diminishing earnings and increasing the chances of a future failure.

LOCAL #673 scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than 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, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, LOCAL #673 scored 10 out of a possible 30, lower than the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's beating 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.