Safe and Sound

BUTTE COMMUNITY

Butte, MT
2
Star Rating
BUTTE COMMUNITY is a Butte, MT-based, NCUA-insured credit union started in 1970. As of December 31, 2017, the credit union held assets of $20.9 million.

Thanks to the efforts of 6 full-time employees, the credit union currently holds loans and leases worth $13.0 million. BUTTE COMMUNITY's 2,577 members currently have $19.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, BUTTE COMMUNITY exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members when a credit union is struggling financially. It follows then that an institution's level of capital is an important measurement of its financial resilience. When it comes to safety and soundness, more capital is preferred.

BUTTE COMMUNITY fell short of the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 8 out of a possible 30 points.

BUTTE COMMUNITY appears to be on less solid financial footing than its peers in this area, with a capitalization ratio of 8.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

This test's purpose is to try to understand how the credit union's loan loss reserves and overall capitalization could be affected by troubled assets, such as unpaid loans.

Having large numbers of these types of assets suggests a credit union may have to use capital to absorb losses, shrinking its cushion of equity. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a future failure.

BUTTE COMMUNITY scored 32 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 38.09.

A lower-than-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of greater financial strength than other credit unions.

Earnings score

A credit union's profitability affects its long-term survivability. Earnings may be retained by the credit union, expanding its capital buffer, or be used to address problematic loans, likely making the credit union better prepared to withstand economic shocks. Obviously, credit unions that are losing money are less able to do those things.

BUTTE COMMUNITY scored 0 out of a possible 30 on Bankrate's test of earnings, below the national average of 10.11.

One indication that the credit union is beating its peers in this area was its earnings ratio of 0.00 percent in our test, better than 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.