NEW YORK – Under other circumstances, Richard Kay might consider LOMTO FCU’s 21.04% capital-to-assets ratio high. But considering virtually all of the $111.2 million CU’s loan portfolio is made up of small business loans, the president/CEO doesn’t think so. “It’s a good position to have a high capital level in that type of loan environment in case anything happens,” said Kay. “Our past history shows we’ve had a good track record with our small business loans, but there have also been times when things have taken a downturn. So having a high capital level gives us a cushion.” Kay said “practically” 99% of LOMTO FCU’s loan portfolio is made up of business-related loans. “Our capital is all out in loans. We basically have very little cash on-hand,” he said. In fact, LOMTO’s capital has been gradually increasing since loan demand among the credit union’s approximately 3,000 members has been very high. “We continually increase our reserves and capital level every month to fund loans,” said Kay. So while high capital might suggest LOMTO is not competitive, Kay says just the opposite is true. “The higher capital we have, the lower the cost of funds is.” LOMTO FCU’s field of membership is primarily the membership of the League of Mutual Taxi Owners. The CU also recently added an underserved area to its FOM.

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