Safe and Sound

HEART OF LOUISIANA

PINEVILLE, LA
4
Star Rating
PINEVILLE, LA-based HEART OF LOUISIANA is an NCUA-insured credit union founded in 1955. The credit union holds $102.6 million in assets, according to December 31, 2017, regulatory filings.

Members have $72.1 million on deposit tended by 49 full-time employees. With that footprint, the credit union holds loans and leases worth $72.1 million. HEART OF LOUISIANA's 16,685 members currently have $89.5 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEART OF LOUISIANA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to grade U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for members when a credit union is experiencing financial instability. It follows then that when it comes to measuring an an institution's financial stability, capital is essential. When looking at safety and soundness, more capital is better.

HEART OF LOUISIANA beat out the national average of 15.65 points on our test to measure capital adequacy, achieving a score of 16 out of a possible 30 points.

HEART OF LOUISIANA had a capitalization ratio of 16.00 percent in our test, the same as the average for all credit unions, suggesting that it's running neck and neck with its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these kinds of assets suggests a credit union could eventually have to use capital to cover losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, diminishing earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, HEART OF LOUISIANA scored 40 out of a possible 40 points, better than the national average of 38.09 points.

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 earning money has an effect on its safety and soundness. Earnings may be retained by the credit union, boosting its capital cushion, or be used to deal with problematic loans, potentially making the credit union more resilient in times of trouble. However, credit unions that are losing money are less able to do those things.

HEART OF LOUISIANA scored 2 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 10.11.

One sign that HEART OF LOUISIANA is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, higher 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.