Safe and Sound

LATVIAN HERITAGE

Grand Rapids, MI
4
Star Rating
Founded in 1963, LATVIAN HERITAGE is an NCUA-insured credit union based in Grand Rapids, MI. As of December 31, 2017, the credit union had assets of $4.7 million.

The credit union holds loans and leases worth $3.3 million. LATVIAN HERITAGE's 575 members currently have $4.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, LATVIAN HERITAGE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial resilience, capital is important. It works as a bulwark against losses and provides protection for members during periods of economic instability for the credit union. From a safety and soundness perspective, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, LATVIAN HERITAGE received a score of 10 out of a possible 30 points, less than the national average of 15.65.

LATVIAN HERITAGE had a capitalization ratio of 10.00 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

Bankrate uses this test to estimate the impact of problem assets, such as unpaid loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with a large number of these types of assets could eventually have to use capital to cover losses, cutting down on its equity buffer. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, diminishing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, LATVIAN HERITAGE scored 20 out of a possible 40 points, lower than the national average of 38.09 points.

A lower-than-average ratio of troubled 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 affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

LATVIAN HERITAGE outperformed the average on Bankrate's earnings test, achieving a score of 30 out of a possible 30.

LATVIAN HERITAGE had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, suggesting that it's outperforming 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.