Safe and Sound

SHELBY COMMUNITY

Shelby, MT
4
Star Rating
Shelby, MT-based SHELBY COMMUNITY is an NCUA-insured credit union started in 1954. As of December 31, 2017, the credit union held assets of $5.3 million.

Thanks to the work of 2 full-time employees, the credit union has amassed loans and leases worth $1.9 million. Its 1,258 members currently have $4.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SHELBY COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the credit union did on the three key criteria Bankrate used to evaluate American credit unions.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an institution's financial fortitude, capital is crucial. It works as a buffer against losses and affords protection for members during periods of financial trouble for the credit union. When looking at safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a credit union's capital, SHELBY COMMUNITY achieved a score of 30 out of a possible 30 points, above the national average of 15.65.

SHELBY COMMUNITY had a capitalization ratio of 30.00 percent in our test, higher than the average for all credit unions, suggesting that it's more well prepared for financial trouble than its peers.

Asset Quality Score

In this test, Bankrate tries to estimate the effect of problem assets, such as past-due mortgages, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with large numbers of these types of assets could eventually be required to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, resulting in depressed earnings and potentially more risk of a future failure.

SHELBY COMMUNITY came in below the national average of 38.09 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A lower-than-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 affects its safety and soundness. Earnings may be retained by the credit union, expanding its capital buffer, or be used to deal with problematic loans, potentially making the credit union better able to withstand financial trouble. Conversely, losses lessen a credit union's ability to do those things.

On Bankrate's test of earnings, SHELBY COMMUNITY scored 0 out of a possible 30, falling short of the national average of 10.11.

One indication that the credit union is outperforming 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.