Safe and Sound

HOLSTON METHODIST

Knoxville, TN
2
Star Rating
Knoxville, TN-based HOLSTON METHODIST is an NCUA-insured credit union founded in 1956. The credit union has assets of $15.1 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 6 full-time employees, the credit union currently holds loans and leases worth $12.3 million. HOLSTON METHODIST's 2,342 members currently have $14.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, HOLSTON METHODIST exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial resilience, capital is crucial. It acts as a bulwark against losses and as protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

HOLSTON METHODIST came in below the national average of 15.65 on our test to measure capital adequacy, achieving a score of 6 out of a possible 30 points.

HOLSTON METHODIST's capitalization ratio of 6.00 percent in our test was worse than the average for all credit unions, suggesting that it's weaker than its peers.

Asset Quality Score

This test is intended 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 kinds of assets may eventually force a credit union to use capital to cover losses, cutting down on its buffer 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 depressed earnings and potentially more risk of a failure in the future.

HOLSTON METHODIST 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 .

A lower-than-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 safety and soundness. A credit union can retain its earnings, boosting its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. Obviously, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, HOLSTON METHODIST scored 10 out of a possible 30, below the national average of 10.11.

One indication that HOLSTON METHODIST is running ahead of 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.