Safe and Sound

LUSO-AMERICAN

Peabody, MA
4
Star Rating
LUSO-AMERICAN is an NCUA-insured credit union founded in 1960 and currently headquartered in Peabody, MA. As of December 31, 2017, the credit union had assets of $91.2 million.

With 16 full-time employees, the credit union currently holds loans and leases worth $65.1 million. Its 7,519 members currently have $78.4 million in shares with the credit union.

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

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial fortitude. It acts as a buffer against losses and affords protection for members when a credit union is struggling financially. When it comes to safety and soundness, the higher the capital, the better.

LUSO-AMERICAN beat out the national average of 15.65 points on our test to measure capital adequacy, receiving a score of 18 out of a possible 30 points.

LUSO-AMERICAN's capitalization ratio of 18.00 percent in our test was higher than the average for all credit unions, an indication that it's on more solid financial footing than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with lots of these kinds of assets may eventually have to use capital to cover losses, reducing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, pushing down earnings and increasing the chances of a future failure.

LUSO-AMERICAN scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.

A lower-than-average ratio of problem assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, are less able to do those things.

On Bankrate's earnings test, LUSO-AMERICAN scored 8 out of a possible 30, below the national average of 10.11.

One indication that LUSO-AMERICAN is running ahead of 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.