Safe and Sound

THE WEST TENNESSEE

MEMPHIS, TN
2
Star Rating
MEMPHIS, TN-based THE WEST TENNESSEE is an NCUA-insured credit union started in 1967. As of December 31, 2017, the credit union held assets of $17.3 million.

With 6 full-time employees, the credit union currently holds loans and leases worth $10.3 million. THE WEST TENNESSEE's 1,382 members currently have $15.4 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, THE WEST TENNESSEE exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union faired on the three key criteria Bankrate used to score U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during times of economic instability for the credit union. Therefore, when it comes to measuring an an institution's financial strength, capital is valuable. When looking at safety and soundness, the more capital, the better.

THE WEST TENNESSEE received a score of 10 out of a possible 30 points on our test to measure the adequacy of a credit union's capital, failing to reach the national average of 15.65.

THE WEST TENNESSEE had a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions, a sign that it's less well prepared for financial trouble than its peers.

Asset Quality Score

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

Having a large number of these kinds of assets could eventually require a credit union to use capital to cover losses, shrinking 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 diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, THE WEST TENNESSEE scored 36 out of a possible 40 points, less than the national average of 38.09 points.

Troubled assets made up 0.00 percent of THE WEST TENNESSEE's total assets 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 profitability has an effect on its safety and soundness. A credit union can retain its earnings, boosting its capital cushion, or use them to address problematic loans, potentially making the credit union better able to withstand financial trouble. However, credit unions that are losing money have less ability to do those things.

On Bankrate's earnings test, THE WEST TENNESSEE scored 0 out of a possible 30, less than the national average of 10.11.

One indication that THE WEST TENNESSEE is running ahead of its peers in this area was its earnings ratio of 0.00 percent in our test, above 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.