Safe and Sound

LA TERRE

HOUMA, LA
3
Star Rating
HOUMA, LA-based LA TERRE is an NCUA-insured credit union founded in 1970. As of December 31, 2017, the credit union held assets of $24.6 million.

Members have $17.2 million on deposit tended by 13 full-time employees. With that footprint, the credit union currently holds loans and leases worth $17.2 million. LA TERRE's 5,099 members currently have $21.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LA TERRE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three important criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a cushion against losses and provides protection for members during periods of economic trouble for the credit union. When it comes to safety and soundness, the more capital, the better.

LA TERRE received a score of 12 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, less than the national average of 15.65.

LA TERRE's capitalization ratio of 12.00 percent in our test was below the average for all credit unions, an indication that it could be less resilient in a crisis than its peers.

Asset Quality Score

This test is intended to try to understand how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having large numbers of these kinds of assets may eventually force a credit union to use capital to cover losses, shrinking 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, resulting in reduced earnings and potentially more risk of a future failure.

LA TERRE scored 36 out of a possible 40 points on Bankrate's test of asset quality, falling short of the national average of 38.09.

A below-average ratio of problem assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand financial trouble. Obviously, credit unions that are losing money are less able to do those things.

LA TERRE scored 0 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 10.11.

One indication that LA TERRE is beating 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.