Safe and Sound

EASTMAN

KINGSPORT, TN
5
Star Rating
EASTMAN is an NCUA-insured credit union founded in 1934 and currently headquartered in KINGSPORT, TN. As of June 30, 2017, the credit union held assets of $3.90 billion.

Members have $3.28 billion on deposit tended by 708 full-time employees. With that footprint, the credit union has amassed loans and leases worth $3.28 billion. EASTMAN's 194,303 members currently have $3.37 billion in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, EASTMAN exhibited a superior condition, earning a full 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 U.S. credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members during times of financial trouble for the credit union. It follows then that a credit union's level of capital is a key measurement of its financial strength. When looking at safety and soundness, the higher the capital, the better.

EASTMAN scored 16 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating the national average of 15.26.

EASTMAN had a capitalization ratio of 13.00 percent in our test, the same as the average for all credit unions, suggesting that it's running neck and neck with its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due mortgages, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these kinds of assets may eventually be required to use capital to absorb losses, cutting down on its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and no longer earning interest for the credit union, resulting in lower earnings and potentially more risk of a future failure.

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

A below-average ratio of problem assets of 1.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital cushion, or be used to address problematic loans, potentially making the credit union more resilient in tough times. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's test of earnings, EASTMAN scored 20 out of a possible 30, exceeding the national average of 10.31.

The credit union had an earnings ratio of 12.00 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.