Safe and Sound

HERITAGE SOUTH COMMUNITY CU

SHELBYVILLE, TN
5
Star Rating
SHELBYVILLE, TN-based HERITAGE SOUTH COMMUNITY CU is an NCUA-insured credit union founded in 1957. Regulatory filings show the credit union having $189.5 million in assets, as of December 31, 2017.

Members have $159.9 million on deposit tended by 76 full-time employees. With that footprint, the credit union currently holds loans and leases worth $159.9 million. HERITAGE SOUTH COMMUNITY CU's 23,640 members currently have $155.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HERITAGE SOUTH COMMUNITY CU exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the credit union faired on the three major criteria Bankrate used to evaluate American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and as protection for members when a credit union is experiencing financial instability. Therefore, when it comes to measuring an an institution's financial strength, capital is crucial. When it comes to safety and soundness, more capital is preferred.

HERITAGE SOUTH COMMUNITY CU racked up 22 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

HERITAGE SOUTH COMMUNITY CU's capitalization ratio of 22.00 percent in our test was above the average for all credit unions, suggesting that it could have an easier time weathering financial trouble than its peers.

Asset Quality Score

This test's purpose is 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 lots of these types of assets means a credit union could eventually have to use capital to cover losses, reducing 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, reducing earnings and increasing the chances of a future failure.

HERITAGE SOUTH COMMUNITY CU scored 36 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 38.09.

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 can be retained by the credit union, giving a boost to its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses reduce a credit union's ability to do those things.

HERITAGE SOUTH COMMUNITY CU received above-average marks on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

HERITAGE SOUTH COMMUNITY CU had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign that it's doing better than 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.