Safe and Sound

DACOTAH

Rapid City, SD
2
Star Rating
DACOTAH is an NCUA-insured credit union started in 1950 and currently headquartered in Rapid City, SD. As of December 31, 2017, the credit union had assets of $9.5 million.

Members have $6.1 million on deposit tended by 5 full-time employees. With that footprint, the credit union has amassed loans and leases worth $6.1 million. DACOTAH's 1,113 members currently have $8.6 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DACOTAH 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 key criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and as protection for members when a credit union is experiencing economic trouble. Therefore, when it comes to measuring an an institution's financial strength, capital is crucial. From a safety and soundness perspective, the higher the capital, the better.

DACOTAH came in below the national average of 15.65 on our test to measure capital adequacy, scoring 8 out of a possible 30 points.

DACOTAH appears to be weaker than its peers in this area, with a capitalization ratio of 8.00 percent in our test, worse than the average for all credit unions.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of problem assets, such as unpaid mortgages, on the credit union's loan loss reserves and overall capitalization.

Having large numbers of these kinds of assets means a credit union could have to use capital to cover losses, diminishing its buffer 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, resulting in depressed earnings and potentially more risk of a failure in the future.

On Bankrate's asset quality test, DACOTAH scored 40 out of a possible 40 points, above the national average of 38.09 points.

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

Earnings score

How successful a credit union is at making money has an effect on its safety and soundness. Earnings can be retained by the credit union, boosting its capital buffer, or be used to address problematic loans, potentially making the credit union more resilient in times of trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

DACOTAH did below-average on Bankrate's test of earnings, achieving a score of 0 out of a possible 30.

The credit union had an earnings ratio of 0.00 percent in our test, better than the average for all credit unions, a sign 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.