Safe and Sound

HEALTH SYSTEMS

KNOXVILLE, TN
1
Star Rating
HEALTH SYSTEMS is an NCUA-insured credit union started in 1953 and currently headquartered in KNOXVILLE, TN. As of December 31, 2017, the credit union held assets of $5.4 million.

Members have $2.5 million on deposit tended by 3 full-time employees. With that footprint, the credit union has amassed loans and leases worth $2.5 million. Its 906 members currently have $5.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HEALTH SYSTEMS exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did on the three important criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members during times of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial strength, capital is important. When it comes to safety and soundness, the higher the capital, the better.

HEALTH SYSTEMS fell short of the national average of 15.65 on our test to measure capital adequacy, receiving a score of 6 out of a possible 30 points.

HEALTH SYSTEMS had a capitalization ratio of 6.00 percent in our test, lower than the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the impact of troubled assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with large numbers of these types of assets may eventually be required to use capital to cover losses, shrinking 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, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, HEALTH SYSTEMS scored 40 out of a possible 40 points, better than the national average of 38.09 points.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at earning money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing problematic loans, potentially making the credit union better prepared to withstand economic trouble. Credit unions that are losing money, however, are less able to do those things.

HEALTH SYSTEMS scored 0 out of a possible 30 on Bankrate's earnings test, coming in below the national average of 10.11.

HEALTH SYSTEMS had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, a sign 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.