Safe and Sound

SOUTHWEST MONTANA COMMUNITY

Anaconda, MT
4
Star Rating
SOUTHWEST MONTANA COMMUNITY is an NCUA-insured credit union started in 1941 and currently based in Anaconda, MT. As of December 31, 2017, the credit union held assets of $109.9 million.

With 27 full-time employees, the credit union has amassed loans and leases worth $48.9 million. Its 7,408 members currently have $94.2 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, SOUTHWEST MONTANA COMMUNITY exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the credit union did on the three major criteria Bankrate used to evaluate American credit unions.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for members when a credit union is struggling financially. Therefore, a credit union's level of capital is an essential measurement of its financial resilience. When looking at safety and soundness, the more capital, the better.

SOUTHWEST MONTANA COMMUNITY exceeded the national average of 15.65 points on our test to measure the adequacy of a credit union's capital, achieving a score of 18 out of a possible 30 points.

SOUTHWEST MONTANA COMMUNITY appears to be more resilient than its peers, with a capitalization ratio of 18.00 percent in our test, higher than the average for all credit unions.

Asset Quality Score

This test is intended to try to understand how the credit union's reserves set aside to cover loan losses, as well as overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these kinds of assets could eventually force a credit union to use capital to absorb losses, cutting down on 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 money, resulting in depressed earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, SOUTHWEST MONTANA COMMUNITY 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 affects its long-term survivability. Earnings can be retained by the credit union, increasing its capital buffer, or be used to address problematic loans, likely making the credit union more resilient in times of trouble. Obviously, credit unions that are losing money are less able to do those things.

SOUTHWEST MONTANA COMMUNITY fell behind the national average on Bankrate's earnings test, achieving a score of 6 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, an indication 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.