Safe and Sound

HERITAGE

Newburgh, IN
4
Star Rating
HERITAGE is an NCUA-insured credit union started in 1965 and currently based in Newburgh, IN. Regulatory filings show the credit union having $555.3 million in assets, as of June 30, 2017.

With 159 full-time employees, the credit union currently holds loans and leases worth $391.4 million. HERITAGE's 54,903 members currently have $494.1 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, HERITAGE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and affords protection for members during times of economic instability for the credit union. It follows then that an institution's level of capital is a valuable measurement of its financial fortitude. When it comes to safety and soundness, the more capital, the better.

HERITAGE fell short of the national average of 15.26 on our test to measure the adequacy of a credit union's capital, receiving a score of 12 out of a possible 30 points.

HERITAGE's capitalization ratio of 10.00 percent in our test was less than the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having lots of these kinds of assets means a credit union could have to use capital to cover losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, decreasing earnings and increasing the chances of a failure in the future.

On Bankrate's test of asset quality, HERITAGE scored 40 out of a possible 40 points, exceeding the national average of 38.15 points.

Troubled assets made up 5.00 percent of the credit union's total assets in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money affects its safety and soundness. Earnings may 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 better prepared to withstand economic shocks. Losses, on the other hand, take away from a credit union's ability to do those things.

HERITAGE exceeded the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One indication that HERITAGE is beating its peers in this area was its earnings ratio of 5.00 percent in our test, above 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.