Safe and Sound

THE TENNESSEE CREDIT UNION

NASHVILLE, TN
4
Star Rating
NASHVILLE, TN-based THE TENNESSEE CREDIT UNION is an NCUA-insured credit union started in 1950. As of December 31, 2017, the credit union held assets of $310.7 million.

Thanks to the work of 78 full-time employees, the credit union holds loans and leases worth $152.9 million. Its 25,073 members currently have $281.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, THE TENNESSEE CREDIT UNION exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three important criteria Bankrate used to score American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for members when a credit union is experiencing economic trouble. Therefore, a credit union's level of capital is an essential measurement of its financial resilience. From a safety and soundness perspective, the more capital, the better.

On our test to measure the adequacy of a credit union's capital, THE TENNESSEE CREDIT UNION received a score of 8 out of a possible 30 points, failing to reach the national average of 15.65.

THE TENNESSEE CREDIT UNION's capitalization ratio of 8.00 percent in our test was below the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

Bankrate uses this test to estimate the impact of problem assets, such as unpaid loans, 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 require a credit union to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, decreasing earnings and increasing the risk of a future failure.

THE TENNESSEE CREDIT UNION exceeded the national average of 38.09 on Bankrate's asset quality test, racking up 40 out of a possible 40 points .

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

Earnings score

A credit union's ability to earn money affects its safety and soundness. Earnings may be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

THE TENNESSEE CREDIT UNION underperformed the average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, an indication that it's outperforming 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.