Safe and Sound

1st Advantage Bank

Saint Peters, MO
1
Star Rating
Started in 2005, 1st Advantage Bank is an FDIC-insured bank based in Saint Peters, MO. The bank has equity of $8.5 million on $98,601,000 in assets, according to June 30, 2017, regulatory filings.

Thanks to the work of 18 full-time employees, the bank holds loans and leases worth $80.2 million, including real estate loans of $70.2 million. U.S. bank customers currently have $75.4 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, 1st Advantage Bank exhibited a significantly below-average condition, earning 1 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three key criteria Bankrate used to grade U.S. banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is key. It works as a cushion against losses and as protection for depositors when a bank is experiencing economic trouble. When it comes to safety and soundness, the more capital, the better.
1st Advantage Bank received a score of 8 out of a possible 30 points on our test to measure capital adequacy, failing to reach the national average of 13.38.

A bank's Tier 1 capital ratio is an important measure of this buffer. 1st Advantage Bank's Tier 1 capital ratio was 9.95 percent, exceeding the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, 1st Advantage Bank held equity amounting to 8.58 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

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

Having extensive holdings of these types of assets may eventually require a bank to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

On Bankrate's asset quality test, 1st Advantage Bank scored 8 out of a possible 40 points, coming in below the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a helpful indicator of asset quality.As of June 30, 2017, 0.67 percent of 1st Advantage Bank's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.04 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the how large that reserve is to the total amount of at-risk loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on 1st Advantage Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its long-term survivability. Earnings may be retained by the bank, increasing its capital buffer, or be used to address problematic loans, likely making the bank more resilient in tough times. However, banks that are losing money have less ability to do those things.

On Bankrate's earnings test, 1st Advantage Bank scored 12 out of a possible 30, less than the national average of 16.52.

One important measure of a bank's earnings is return on equity, or net income (essentially profit) divided by total equity. The most recent annualized quarterly return on equity for 1st Advantage Bank was 5.25 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $219,000 on total equity of $8.5 million. The bank experienced an annualized return on average assets, or ROA, of 0.46 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.

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.