Safe and Sound

NORTHEAST COMMUNITY

ELIZABETHTON, TN
5
Star Rating
NORTHEAST COMMUNITY is an NCUA-insured credit union started in 1952 and currently based in ELIZABETHTON, TN. Regulatory filings show the credit union having assets of $115.4 million, as of December 31, 2017.

With 40 full-time employees, the credit union has amassed loans and leases worth $85.7 million. NORTHEAST COMMUNITY's 10,768 members currently have $95.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, NORTHEAST COMMUNITY exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three major criteria Bankrate used to score American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members during times of economic instability for the credit union. Therefore, a credit union's level of capital is a key measurement of its financial fortitude. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, NORTHEAST COMMUNITY scored 22 out of a possible 30 points, beating the national average of 15.65.

NORTHEAST COMMUNITY appears to be on more solid financial footing than its peers, with a capitalization ratio of 22.00 percent in our test, above the average for all credit unions.

Asset Quality Score

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

Having large numbers of these kinds of assets means a credit union could have to use capital to absorb losses, reducing 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 money, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, NORTHEAST COMMUNITY scored 36 out of a possible 40 points, coming in below the national average of 38.09 points.

The credit union's ratio of troubled assets was 0.00 percent in our test, lower than the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability has an effect on its long-term survivability. Earnings can be retained by the credit union, increasing its capital cushion, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Credit unions that are losing money, however, are less able to do those things.

NORTHEAST COMMUNITY scored 18 out of a possible 30 on Bankrate's test of earnings, better than the national average of 10.11.

One sign that the credit union is doing better than 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.