Safe and Sound

DAKOTA WEST

WATFORD CITY, ND
4
Star Rating
Founded in 1941, DAKOTA WEST is an NCUA-insured credit union based in WATFORD CITY, ND. Regulatory filings show the credit union having assets of $244.0 million, as of December 31, 2017.

Members have $127.0 million on deposit tended by 53 full-time employees. With that footprint, the credit union has amassed loans and leases worth $127.0 million. DAKOTA WEST's 7,583 members currently have $214.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, DAKOTA WEST exhibited a good condition, earning 4 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 grade U.S. credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and as protection for members during periods of economic instability for the credit union. It follows then that when it comes to measuring an a credit union's financial resilience, capital is crucial. When looking at safety and soundness, more capital is preferred.

DAKOTA WEST received a score of 14 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 15.65.

DAKOTA WEST appears to be less well prepared for financial trouble than its peers in this area, with a capitalization ratio of 14.00 percent in our test, lower than the average for all credit unions.

Asset Quality Score

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

A credit union with a large number of these kinds of assets could eventually have to use capital to absorb losses, shrinking its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning money, reducing earnings and elevating the risk of a future failure.

DAKOTA WEST scored 36 out of a possible 40 points on Bankrate's asset quality test, lower than the national average of 38.09.

DAKOTA WEST's ratio of troubled assets was 0.00 percent in our test, below the national average and suggestive of greater financial strength than other credit unions.

Earnings score

A credit union's earnings performance has an effect on its safety and soundness. A credit union can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the credit union better prepared to withstand financial shocks. Credit unions that are losing money, however, have less ability to do those things.

DAKOTA WEST scored 16 out of a possible 30 on Bankrate's earnings test, beating out the national average of 10.11.

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, 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.