Additional Factors: Institutions with a small asset base or a short operating history can represent an instability risk beyond what their financial ratios indicate. Western Heritage Bank has a relatively low asset base.
The Texas Ratio is an indicator of how much funds a bank has available compared to the total value of loans considered at risk. As of December 31, 2013 Western Heritage Bank had $999,000 in non-current loans and owned real-estate with $8.58 million in equity and loan loss allowances on hand to cover it. This gives Western Heritage Bank a Texas Ratio of 11.65% which is above average. Any bank with a Texas Ratio near or greater than 100% is considered at risk.
The Texas Ratio for Western Heritage Bank decreased slightly from 14.32% as of December 31, 2012 to 11.65% as of December 31, 2013, resulting in a positive change of 18.66%.This indicates that the balance sheet and financial strength for Western Heritage Bank has improved slightly in recent periods.
In the past year, Western Heritage Bank has decreased its total deposits by -$3.51 million, resulting in -5.57% growth for the year. A strong track record of growth is an indicator of consumer confidence and the bank's ability to strengthen its balance sheet. The growth Western Heritage Bank has shown is below average.
Both FDIC and NCUA consider capitalization levels of banks and credit unions to be of high importance. Higher capitalization allows for a greater buffer when cover loans that may fail in the future. Western Heritage Bank has $68.34 million in assets with $8.58 million in equity, resulting in a capitalization level of 12.55%, which is excellent.