Safe and Sound

CUTTING EDGE

MILWAUKIE, OR
4
Star Rating
MILWAUKIE, OR-based CUTTING EDGE is an NCUA-insured credit union started in 1953. Regulatory filings show the credit union having assets of $43.8 million, as of December 31, 2017.

Members have $31.3 million on deposit tended by 12 full-time employees. With that footprint, the credit union holds loans and leases worth $31.3 million. CUTTING EDGE's 4,186 members currently have $38.3 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, CUTTING EDGE exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
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THE INSTITUTION'S SCORE

Capital Score

Capital works as a cushion against losses and provides protection for members when a credit union is experiencing economic trouble. It follows then that an institution's level of capital is a useful measurement of its financial strength. When it comes to safety and soundness, the higher the capital, the better.

CUTTING EDGE finished below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, receiving a score of 14 out of a possible 30 points.

CUTTING EDGE's capitalization ratio of 14.00 percent in our test was below the average for all credit unions, an indication that it's weaker than its peers.

Asset Quality Score

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

Having a large number of these types of assets may eventually require a credit union to use capital to absorb losses, cutting down on 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 interest for the credit union, reducing earnings and increasing the chances of a future failure.

On Bankrate's asset quality test, CUTTING EDGE scored 36 out of a possible 40 points, falling short of the national average of 38.09 points.

The credit union's ratio of troubled assets was 0.00 percent in our test, beneath the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's profitability affects its safety and soundness. A credit union can retain its earnings, increasing its capital buffer, or put them to work addressing problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money are less able to do those things.

CUTTING EDGE exceeded the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One indication that the credit union 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.