Safe and Sound

DAKOTA RAIL LINE

HURON, SD
3
Star Rating
HURON, SD-based DAKOTA RAIL LINE is an NCUA-insured credit union started in 1954. Regulatory filings show the credit union having assets of $5.5 million, as of December 31, 2017.

Members have $4.6 million on deposit tended by 2 full-time employees. With that footprint, the credit union has amassed loans and leases worth $4.6 million. DAKOTA RAIL LINE's 587 members currently have $5.1 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DAKOTA RAIL LINE exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the credit union faired on the three major criteria Bankrate used to score U.S. credit unions.

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring a credit union's financial fortitude, capital is essential. It acts as a bulwark against losses and provides protection for members when a credit union is struggling financially. When it comes to safety and soundness, the more capital, the better.

On our test to measure capital adequacy, DAKOTA RAIL LINE received a score of 6 out of a possible 30 points, below the national average of 15.65.

DAKOTA RAIL LINE appears to be weaker than its peers in this area, with a capitalization ratio of 6.00 percent in our test, less than the average for all credit unions.

Asset Quality Score

Bankrate uses this test to estimate the effect of problem assets, such as unpaid loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with extensive holdings of these types of assets may eventually be forced to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in diminished earnings and potentially more risk of a future failure.

DAKOTA RAIL LINE fell short of the national average of 38.09 on Bankrate's asset quality test, racking up 24 out of a possible 40 points .

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 safety and soundness. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union more resilient in tough times. Losses, on the other hand, reduce a credit union's ability to do those things.

DAKOTA RAIL LINE scored 18 out of a possible 30 on Bankrate's test of earnings, beating the national average of 10.11.

DAKOTA RAIL LINE had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, suggesting that it's doing better than 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.