Safe and Sound

WAKOTA

SOUTH ST PAUL, MN
4
Star Rating
WAKOTA is a SOUTH ST PAUL, MN-based, NCUA-insured credit union that opened its doors in 1931. Regulatory filings show the credit union having assets of $28.0 million, as of December 31, 2017.

Members have $20.0 million on deposit tended by 8 full-time employees. With that footprint, the credit union currently holds loans and leases worth $20.0 million. Its 3,969 members currently have $24.0 million in shares with the credit union.

Overall, Bankrate believes that, as of December 31, 2017, WAKOTA exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the credit union faired on the three important criteria Bankrate used to grade American credit unions.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a cushion against losses and affords protection for members during periods of economic trouble for the credit union. It follows then that when it comes to measuring an a credit union's financial fortitude, capital is key. When looking at safety and soundness, the more capital, the better.

WAKOTA received a score of 10 out of a possible 30 points on our test to measure capital adequacy, below the national average of 15.65.

WAKOTA had a capitalization ratio of 10.00 percent in our test, lower than the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as past-due loans, on the credit union's capitalization and allocated loan loss reserves.

A credit union with lots of these types of assets could eventually be forced to use capital to absorb losses, decreasing 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 interest for the credit union, resulting in lower earnings and potentially more risk of a failure in the future.

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

The credit union's ratio of problem assets was 0.00 percent in our test, less than the national average and 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. A credit union can retain its earnings, expanding its capital cushion, or use them to deal with problematic loans, likely making the credit union better prepared to withstand economic trouble. Losses, on the other hand, lessen a credit union's ability to do those things.

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

One sign that WAKOTA is beating 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.