Safe and Sound

APPALACHIAN COMMUNITY

Gray, TN
4
Star Rating
APPALACHIAN COMMUNITY is a Gray, TN-based, NCUA-insured credit union founded in 1993. Regulatory filings show the credit union having $214.3 million in assets, as of December 31, 2017.

Thanks to the efforts of 77 full-time employees, the credit union has amassed loans and leases worth $170.8 million. Its 16,042 members currently have $161.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, APPALACHIAN COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of an institution's financial fortitude. It acts as a cushion against losses and provides protection for members when a credit union is struggling financially. From a safety and soundness perspective, the more capital, the better.

APPALACHIAN COMMUNITY received a score of 8 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 15.65.

APPALACHIAN COMMUNITY appears to be weaker than its peers in this area, with a capitalization ratio of 8.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

This test's purpose is to estimate how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with extensive holdings of these types of assets may eventually have to use capital to absorb losses, diminishing its equity cushion. 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, pushing down earnings and increasing the risk of a future failure.

On Bankrate's asset quality test, APPALACHIAN COMMUNITY scored 32 out of a possible 40 points, failing to reach the national average of 38.09 points.

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

A credit union's earnings performance affects its long-term survivability. Earnings can be retained by the credit union, expanding its capital cushion, or be used to deal with problematic loans, likely making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, are less able to do those things.

APPALACHIAN COMMUNITY outperformed the average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.

One sign that the credit union is running ahead of its peers in this area was its earnings ratio of 0.00 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.