Safe and Sound

KOKOMO HERITAGE

KOKOMO, IN
3
Star Rating
Started in 1959, KOKOMO HERITAGE is an NCUA-insured credit union based in KOKOMO, IN. The credit union holds $10.0 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 5 full-time employees, the credit union currently holds loans and leases worth $8.2 million. KOKOMO HERITAGE's 1,849 members currently have $7.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, KOKOMO HERITAGE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is valuable. It works as a buffer against losses and affords protection for members when a credit union is experiencing financial instability. When looking at safety and soundness, more capital is preferred.

KOKOMO HERITAGE fell below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 14 out of a possible 30 points.

KOKOMO HERITAGE had a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions, suggesting that it could have a harder time weathering financial trouble 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 loans.

A credit union with large numbers of these kinds of assets could eventually have to use capital to absorb losses, diminishing its buffer of equity. 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, resulting in lower earnings and potentially more risk of a failure in the future.

KOKOMO HERITAGE scored below the national average of 38.09 on Bankrate's test of asset quality, racking up 28 out of a possible 40 points .

KOKOMO HERITAGE's ratio of troubled assets was 0.00 percent in our test, less than the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its safety and soundness. A credit union can retain its earnings, expanding its capital buffer, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic shocks. Conversely, losses take away from a credit union's ability to do those things.

KOKOMO HERITAGE scored 6 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 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.