Safe and Sound

UNITED HERITAGE

AUSTIN, TX
4
Star Rating
AUSTIN, TX-based UNITED HERITAGE is an NCUA-insured credit union started in 1957. The credit union has $932.4 million in assets, according to June 30, 2017, regulatory filings.

Thanks to the efforts of 190 full-time employees, the credit union holds loans and leases worth $773.3 million. UNITED HERITAGE's 60,374 members currently have $846.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, UNITED HERITAGE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three important criteria Bankrate used to evaluate American 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 provides protection for members during times of economic trouble for the credit union. Therefore, an institution's level of capital is a valuable measurement of its financial fortitude. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, UNITED HERITAGE received a score of 8 out of a possible 30 points, below the national average of 15.26.

UNITED HERITAGE had a capitalization ratio of 8.00 percent in our test, less than the average for all credit unions, an indication that it's on less solid financial footing than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

Having extensive holdings of these types of assets means a credit union could eventually have to use capital to absorb losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

UNITED HERITAGE exceeded the national average of 38.15 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

UNITED HERITAGE's ratio of problem assets was 1.00 percent in our test, less than the national average and 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. 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 able to withstand financial trouble. Obviously, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, UNITED HERITAGE scored 18 out of a possible 30, beating the national average of 10.31.

The credit union had an earnings ratio of 8.00 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.