Safe and Sound

SOUTHEAST FINANCIAL

FRANKLIN, TN
1
Star Rating
SOUTHEAST FINANCIAL is an NCUA-insured credit union founded in 1936 and currently headquartered in FRANKLIN, TN. Regulatory filings show the credit union having $377.9 million in assets, as of December 31, 2017.

Members have $290.5 million on deposit tended by 141 full-time employees. With that footprint, the credit union holds loans and leases worth $290.5 million. Its 40,690 members currently have $345.7 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHEAST FINANCIAL 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 faired on the three important criteria Bankrate used to score American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for members when a credit union is struggling financially. Therefore, when it comes to measuring an an institution's financial resilience, capital is valuable. From a safety and soundness perspective, more capital is better.

SOUTHEAST FINANCIAL scored below the national average of 15.65 on our test to measure capital adequacy, receiving a score of 4 out of a possible 30 points.

SOUTHEAST FINANCIAL's capitalization ratio of 4.00 percent in our test was less than the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

This test is intended to estimate how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by troubled assets, such as past-due mortgages.

A credit union with large numbers of these kinds of assets could eventually be required to use capital to cover losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, SOUTHEAST FINANCIAL scored 32 out of a possible 40 points, falling short of 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

A credit union's profitability affects its long-term survivability. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, take away from a credit union's ability to do those things.

SOUTHEAST FINANCIAL scored 0 out of a possible 30 on Bankrate's earnings test, falling short of the national average of 10.11.

The credit union had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, an indication 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.