Safe and Sound

BASF CHATTANOOGA

CHATTANOOGA, TN
4
Star Rating
Founded in 1959, BASF CHATTANOOGA is an NCUA-insured credit union headquartered in CHATTANOOGA, TN. As of December 31, 2017, the credit union had assets of $3.0 million.

BASF CHATTANOOGA's 452 members currently have $2.5 million in shares with the credit union. With that footprint, the credit union has amassed loans and leases worth $1.7 million.

Overall, Bankrate believes that, as of December 31, 2017, BASF CHATTANOOGA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three key criteria Bankrate used to evaluate American credit unions.

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 when a credit union is experiencing financial instability. Therefore, a credit union's level of capital is an important measurement of its financial fortitude. When it comes to safety and soundness, the more capital, the better.

BASF CHATTANOOGA achieved a score of 22 out of a possible 30 points on our test to measure capital adequacy, exceeding the national average of 15.65.

BASF CHATTANOOGA appears to be stronger than its peers, with a capitalization ratio of 22.00 percent in our test, better than the average for all credit unions.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as unpaid mortgages.

Having extensive holdings of these types of assets may eventually require a credit union to use capital to cover losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

BASF CHATTANOOGA fell short of the national average of 38.09 on Bankrate's test of asset quality, racking up 28 out of a possible 40 points .

BASF CHATTANOOGA's ratio of troubled assets was 0.00 percent in our test, lower than 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 long-term survivability. Earnings can be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand economic shocks. Losses, on the other hand, diminish a credit union's ability to do those things.

On Bankrate's test of earnings, BASF CHATTANOOGA scored 12 out of a possible 30, above the national average of 10.11.

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