Overview of LREFCU
LREFCU officially got its credit union charter in the year 1976. The credit union falls under the category: multiple common bond – primarily communications and utilities. In terms of its lending activity, the credit union is mainly engaged in providing auto loans. These loans represent 46% of its total lending. LREFCU’s total assets are larger than 66% of credit unions in the United States. LREFCU’s deposits are insured by the National Credit Union Administration (NCUA), which operates very similarly to the Federal Deposit Insurance Corporation, except with a focus on credit unions. The NCUA also regulates and supervises LREFCU’s operations. The company has a total of 4 branches and employs a total of 22 employees.
Overview of the Credit Union’s Assets and Liabilities
As previously indicated, the credit union currently has total assets of $112 million, which makes it larger than 66% of credit unions in the United States. LREFCU also has net loans outstanding to customers of $77 million and a deposit base of $102 million. The average credit union in LREFCU’s peer set has a loan to deposit ratio of approximately 63%. In comparison, LREFCU has a loan to deposit ratio of 76% which is clearly higher than the peer set. A lower ratio is generally better as it indicates that the lending activities of a credit union are more comfortably covered by its deposit base. Deposits are often the most cost effective source of funding for banks and credit unions. Taking a closer look at the credit union’s loan portfolio, we see that auto loans represent 46% of the total and currently stands at $35 million, while there is $19 million of loans outstanding from mortgages and lines of credit which represents 24% of the credit union’s loan portfolio.
Contact and Other Helpful Information
- Main Office Address: 315 Main St, Middlebourne, WV 26149-9602
- Website: http://www.lrefcu.org
- Phone: (304) 758-4308
- Charter Number: 22241
- Charter Year: 1976
- Employees: 22
- Routing Number: 243486067
- Membership: The credit union has a membership base of 8,232 which is significantly larger than the average credit union operating within the state. Credit unions in West Virginia each have on average 4,509 members. Over the past three years, the credit union’s total base of members has increased by 23%.
LREFCU: Financial Overview
Detailed above is a chart showing the progression of four important balance sheet items over the past year for LREFCU. Assets and total loans for the credit union have grown by 19.9% and increased by 11.6%, respectively. In addition, the company’s auto loans, which as noted earlier is the largest portion of the loan book, has expanded by 16.2%. Lastly, the credit union’s deposits have grown by 29.9%. A credit union’s net worth is a good proxy for the value that a credit union has accrued over time. Based on the latest available information, LREFCU’s net worth stands at $10 million. This implies that the credit union has a net worth per member of $1,236 which is below the national average of $1,606.
Overview of the Credit Union’s Performance Metrics
The above chart shows some of the important metrics we look at when assessing a credit union, and compares these to the average credit union of comparable size. It also shows how these metrics have fared over the past year. If we take a look at LREFCU’s return on assets – which is usually a good measure of how efficiently a company is using its assets to produce profits – we see that the credit union is well above the average comparable credit union and also that over the past year ROA has improved given the year over year change of 0.10%. Moving on to the credit union’s delinquency rate, which tells us how much of a credit union’s loan book is delinquent, the credit union is above its peer group on this metric and compared with the prior year it has improved. Keep in mind that a higher delinquency rate indicates a lower performing loan book so a declining rate is a favorable trend. Finally, the net worth ratio for the credit union is 9.1% which is below its peer group average of 9.7%. This metric has been relatively stable on a year over year basis and stood at 9.0% a year ago. Based on the NCUA guidelines, the credit union is considered to be well capitalized.
After factoring in all the relevant information and data, our final rating for LREFCU is 3.1 out of 5.0, which is above average. Finally, please note that the rating information presented is based on our proprietary scoring system. None of the work presented is intended to be investment advice or advice of any sort and is presented purely for informational purposes.