Safe and Sound

U. T.

Knoxville, TN
4
Star Rating
Knoxville, TN-based U. T. is an NCUA-insured credit union started in 1969. The credit union holds $270.6 million in assets, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 69 full-time employees, the credit union currently holds loans and leases worth $215.4 million. U. T.'s 23,243 members currently have $244.9 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, U. T. 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 major criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and provides protection for members during times of financial instability for the credit union. Therefore, when it comes to measuring an an institution's financial fortitude, capital is crucial. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, U. T. received a score of 8 out of a possible 30 points, less than the national average of 15.65.

U. T.'s capitalization ratio of 8.00 percent in our test was less than the average for all credit unions, suggesting that it's less well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to determine the effect of problem assets, such as past-due mortgages, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these kinds of assets could eventually have to use capital to cover losses, cutting down on its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, pushing down earnings and elevating the chances of a future failure.

U. T. scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating the national average of 38.09.

The credit union's ratio of troubled assets was 0.00 percent 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 affects its safety and soundness. Earnings can be retained by the credit union, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the credit union better able to withstand financial shocks. Losses, on the other hand, reduce a credit union's ability to do those things.

On Bankrate's earnings test, U. T. scored 18 out of a possible 30, beating out the national average of 10.11.

One sign that U. T. is doing better than 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.