Safe and Sound

1ST COMMUNITY

SPARTA, WI
4
Star Rating
SPARTA, WI-based 1ST COMMUNITY is an NCUA-insured credit union started in 1961. Regulatory filings show the credit union having assets of $153.1 million, as of December 31, 2017.

With 43 full-time employees, the credit union has amassed loans and leases worth $125.6 million. 1ST COMMUNITY's 11,533 members currently have $127.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, 1ST COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union did 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

When it comes to measuring a credit union's financial resilience, capital is crucial. It works as a cushion against losses and as protection for members during times of financial instability for the credit union. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, 1ST COMMUNITY received a score of 10 out of a possible 30 points, falling short of the national average of 15.65.

1ST COMMUNITY had a capitalization ratio of 10.00 percent in our test, worse than the average for all credit unions, suggesting that it's on less solid financial footing than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of troubled assets, such as past-due loans, on the credit union's loan loss reserves and overall capitalization.

A credit union with extensive holdings of these types of assets may eventually be forced to use capital to cover losses, shrinking its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the credit union, diminishing earnings and increasing the risk of a future failure.

1ST COMMUNITY scored 40 out of a possible 40 points on Bankrate's asset quality test, exceeding the national average of 38.09.

The credit union's ratio of problem assets was 0.00 percent in our test, less than the national average and potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's ability to earn money affects its long-term survivability. A credit union can retain its earnings, increasing its capital cushion, or put them to work addressing problematic loans, likely making the credit union better able to withstand financial shocks. Losses, on the other hand, lessen a credit union's ability to do those things.

On Bankrate's test of earnings, 1ST COMMUNITY scored 16 out of a possible 30, beating out the national average of 10.11.

1ST COMMUNITY had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's running ahead of 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.