Safe and Sound

DIXIE LINE

NASHVILLE, TN
5
Star Rating
DIXIE LINE is a NASHVILLE, TN-based, NCUA-insured credit union that opened its doors in 1932. The credit union has $11.0 million in assets, according to June 30, 2017, regulatory filings.

With 5 full-time employees, the credit union holds loans and leases worth $7.5 million. Its 1,024 members currently have $7.8 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, DIXIE LINE exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union faired on the three important 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 works as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, an institution's level of capital is an essential measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

DIXIE LINE beat out the national average of 15.26 points on our test to measure the adequacy of a credit union's capital, receiving a score of 24 out of a possible 30 points.

DIXIE LINE appears to be stronger than its peers, with a capitalization ratio of 17.00 percent in our test, above the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having extensive holdings of these types of assets may eventually require a credit union to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, reducing earnings and elevating the risk of a failure in the future.

DIXIE LINE exceeded the national average of 38.15 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

Troubled assets made up 6.00 percent of DIXIE LINE's total assets in our test, below the national average and suggestive of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the credit union better prepared to withstand financial trouble. Obviously, credit unions that are losing money have less ability to do those things.

DIXIE LINE underperformed the average on Bankrate's test of earnings, achieving a score of 10 out of a possible 30.

One sign that the credit union is beating its peers in this area was its earnings ratio of 4.00 percent in our test, better 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.