Safe and Sound

SKY

Livingston, MT
4
Star Rating
SKY is an NCUA-insured credit union started in 1935 and currently headquartered in Livingston, MT. As of December 31, 2017, the credit union held assets of $100.4 million.

With 44 full-time employees, the credit union holds loans and leases worth $67.1 million. Its 9,110 members currently have $89.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SKY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the credit union did on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for members when a credit union is experiencing economic instability. It follows then that an institution's level of capital is a valuable measurement of its financial fortitude. From a safety and soundness perspective, more capital is better.

SKY scored below the national average of 15.65 on our test to measure the adequacy of a credit union's capital, achieving a score of 8 out of a possible 30 points.

SKY's capitalization ratio of 8.00 percent in our test was below the average for all credit unions, a sign that it's on less solid financial footing than its peers.

Asset Quality Score

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

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 interest for the credit union, resulting in reduced earnings and potentially more risk of a future failure.

SKY scored 36 out of a possible 40 points on Bankrate's test of asset quality, coming in below the national average of 38.09.

A below-average ratio of troubled assets of 0.00 percent in our test was potentially indicative of superior financial strength compared to other credit unions.

Earnings score

How successful a credit union is at making money has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, potentially making the credit union better able to withstand economic shocks. However, credit unions that are losing money are less able to do those things.

On Bankrate's test of earnings, SKY scored 12 out of a possible 30, beating out the national average of 10.11.

SKY had an earnings ratio of 0.00 percent in our test, above the average for all credit unions, a sign that it's outperforming 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.