Safe and Sound

PATHWAY

CLEVELAND, TN
3
Star Rating
PATHWAY is an NCUA-insured credit union founded in 1967 and currently based in CLEVELAND, TN. As of December 31, 2017, the credit union had assets of $5.2 million.

Members have $2.3 million on deposit tended by 2 full-time employees. With that footprint, the credit union has amassed loans and leases worth $2.3 million. PATHWAY's 1,014 members currently have $4.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, PATHWAY exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial stability, capital is useful. It acts as a bulwark against losses and as protection for members during times of financial instability for the credit union. From a safety and soundness perspective, more capital is preferred.

On our test to measure capital adequacy, PATHWAY received a score of 10 out of a possible 30 points, falling short of the national average of 15.65.

PATHWAY appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 10.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

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

A credit union with large numbers of these types of assets could eventually be forced 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 future failure.

PATHWAY scored 40 out of a possible 40 points on Bankrate's test of asset quality, exceeding the national average of 38.09.

A below-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 making money has an effect on its long-term survivability. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's test of earnings, PATHWAY scored 2 out of a possible 30, less than the national average of 10.11.

PATHWAY 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.