Safe and Sound

CORNERSTONE FINANCIAL

Nashville, TN
4
Star Rating
Nashville, TN-based CORNERSTONE FINANCIAL is an NCUA-insured credit union founded in 1962. The credit union has assets of $343.3 million, according to December 31, 2017, regulatory filings.

With 95 full-time employees, the credit union has amassed loans and leases worth $282.2 million. CORNERSTONE FINANCIAL's 37,201 members currently have $307.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CORNERSTONE FINANCIAL exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union faired on the three important criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members when a credit union is experiencing financial trouble. Therefore, when it comes to measuring an a credit union's financial stability, capital is useful. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, CORNERSTONE FINANCIAL received a score of 8 out of a possible 30 points, coming in below the national average of 15.65.

CORNERSTONE FINANCIAL had a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions, an indication that it could have a harder time weathering financial trouble than its peers.

Asset Quality Score

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

Having extensive holdings of these types of assets means a credit union may eventually have to use capital to absorb losses, cutting down on its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and elevating the chances of a future failure.

CORNERSTONE FINANCIAL fell below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

On Bankrate's earnings test, CORNERSTONE FINANCIAL scored 18 out of a possible 30, beating the national average of 10.11.

One indication that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.