Safe and Sound

SELECT SEVEN

Johnson City, TN
3
Star Rating
Started in 1949, SELECT SEVEN is an NCUA-insured credit union headquartered in Johnson City, TN. The credit union has assets of $53.8 million, according to December 31, 2017, regulatory filings.

Members have $46.2 million on deposit tended by 25 full-time employees. With that footprint, the credit union has amassed loans and leases worth $46.2 million. SELECT SEVEN's 8,501 members currently have $41.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SELECT SEVEN 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 major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is a key measurement of its financial resilience. When looking at safety and soundness, more capital is preferred.

On our test to measure capital adequacy, SELECT SEVEN received a score of 14 out of a possible 30 points, below the national average of 15.65.

SELECT SEVEN had a capitalization ratio of 14.00 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

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

A credit union with extensive holdings of these kinds of assets may eventually be forced to use capital to absorb losses, decreasing its equity cushion. 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 failure in the future.

On Bankrate's test of asset quality, SELECT SEVEN scored 32 out of a possible 40 points, less than the national average of 38.09 points.

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

Earnings score

A credit union's earnings performance affects 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 better able to withstand economic trouble. Losses, on the other hand, reduce a credit union's ability to do those things.

SELECT SEVEN scored 2 out of a possible 30 on Bankrate's earnings test, failing to reach the national average of 10.11.

SELECT SEVEN had an earnings ratio of 0.00 percent in our test, higher than the average for all credit unions, suggesting that it's running ahead of 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.