Safe and Sound

TNCONNECT

KNOXVILLE, TN
2
Star Rating
KNOXVILLE, TN-based TNCONNECT is an NCUA-insured credit union founded in 1924. Regulatory filings show the credit union having assets of $51.7 million, as of December 31, 2017.

Thanks to the work of 17 full-time employees, the credit union has amassed loans and leases worth $37.5 million. Its 6,546 members currently have $46.8 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, TNCONNECT exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at 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 strength, capital is essential. It works as a buffer against losses and affords protection for members during times of financial instability for the credit union. When looking at safety and soundness, the more capital, the better.

TNCONNECT fell below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, racking up 6 out of a possible 30 points.

TNCONNECT's capitalization ratio of 6.00 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

This test's purpose is to estimate how the credit union's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having extensive holdings of these types of assets suggests a credit union could eventually have to use capital to cover 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, reducing earnings and elevating the chances of a future failure.

TNCONNECT scored 32 out of a possible 40 points on Bankrate's asset quality test, coming in below the national average of 38.09.

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

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, likely making the credit union more resilient in times of trouble. Credit unions that are losing money, however, have less ability to do those things.

On Bankrate's earnings test, TNCONNECT scored 2 out of a possible 30, below 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, suggesting that it's beating 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.