Safe and Sound

TENNESSEE VALLEY

Chattanooga, TN
5
Star Rating
Founded in 1936, TENNESSEE VALLEY is an NCUA-insured credit union based in Chattanooga, TN. The credit union has assets of $1.35 billion, according to December 31, 2017, regulatory filings.

Members have $986.4 million on deposit tended by 282 full-time employees. With that footprint, the credit union holds loans and leases worth $986.4 million. TENNESSEE VALLEY's 133,048 members currently have $1.16 billion in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TENNESSEE VALLEY exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to grade American credit unions on safety and soundness.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion 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 key. From a safety and soundness perspective, more capital is preferred.

TENNESSEE VALLEY achieved a score of 16 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, above the national average of 15.65.

TENNESSEE VALLEY had a capitalization ratio of 16.00 percent in our test, identical the average for all credit unions, suggesting that it's right in line with its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

Having a large number of these types of assets may eventually force a credit union to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and increasing the chances of a failure in the future.

On Bankrate's asset quality test, TENNESSEE VALLEY scored 40 out of a possible 40 points, beating the national average of 38.09 points.

A lower-than-average ratio of problem 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 earning money affects its safety and soundness. A credit union can retain its earnings, giving a boost to its capital cushion, or put them to work addressing 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.

TENNESSEE VALLEY exceeded the national average on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

One sign that TENNESSEE VALLEY is running ahead of 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.