Safe and Sound

TENN-AM WATER CO.

CHATTANOOGA, TN
4
Star Rating
CHATTANOOGA, TN-based TENN-AM WATER CO. is an NCUA-insured credit union started in 1935. As of December 31, 2017, the credit union had assets of $2.9 million.

The credit union currently holds loans and leases worth $1.9 million. TENN-AM WATER CO.'s 449 members currently have $2.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TENN-AM WATER CO. exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is useful. It works as a cushion against losses and provides protection for members when a credit union is experiencing financial instability. When it comes to safety and soundness, more capital is better.

TENN-AM WATER CO. racked up 30 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, beating out the national average of 15.65.

TENN-AM WATER CO. appears to be more well prepared for financial trouble than its peers, with a capitalization ratio of 30.00 percent in our test, above the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the impact of troubled assets, such as unpaid mortgages, on the credit union's capitalization and allocated loan loss reserves.

Having a large number of these kinds of assets means a credit union may eventually have to use capital to cover losses, decreasing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in depressed earnings and potentially more risk of a failure in the future.

TENN-AM WATER CO. came in below the national average of 38.09 on Bankrate's asset quality test, racking up 36 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 greater financial strength than other credit unions.

Earnings score

How successful a credit union is at making money affects its safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union more resilient in tough times. Losses, on the other hand, lessen a credit union's ability to do those things.

TENN-AM WATER CO. scored 0 out of a possible 30 on Bankrate's earnings test, less than the national average of 10.11.

One indication that the credit union is doing better than its peers in this area was its earnings ratio of 0.00 percent in our test, higher than 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.