Safe and Sound

1st Cameron State Bank

Cameron, MO
4
Star Rating
1st Cameron State Bank is an FDIC-insured bank started in 1986 and currently headquartered in Cameron, MO. The bank holds equity of $4.9 million on assets of $60.9 million, according to June 30, 2017, regulatory filings.

U.S. bank customers have $46.0 million on deposit at 2 offices in MO run by 14 full-time employees. With that footprint, the bank currently holds loans and leases worth $27.6 million, including real estate loans of $25.8 million.

Overall, Bankrate believes that, as of June 30, 2017, 1st Cameron State Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to grade U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for depositors when a bank is struggling financially. Therefore, when it comes to measuring an a bank's financial strength, capital is essential. When it comes to safety and soundness, the more capital, the better.
On our test to measure the adequacy of a bank's capital, 1st Cameron State Bank received a score of 8 out of a possible 30 points, falling short of the national average of 13.38.

One essential measure of this buffer is a bank's Tier 1 capital ratio. 1st Cameron State Bank's Tier 1 capital ratio was 19.99 percent, higher than the 6 percent level considered adequate by regulators, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial headwinds.

Overall, 1st Cameron State Bank held equity amounting to 8.11 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test's purpose is to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these types of assets may eventually force a bank to use capital to cover losses, reducing its equity cushion. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, reducing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, 1st Cameron State Bank scored 40 out of a possible 40 points, beating out 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, none of 1st Cameron State Bank's loans were noncurrent -- in other words, 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 . That reserve's size can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on 1st Cameron State Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the bank better prepared to withstand financial shocks. Conversely, losses reduce a bank's ability to do those things.

1st Cameron State Bank scored 8 out of a possible 30 on Bankrate's test of earnings, falling short of the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. 1st Cameron State Bank's most recent annualized quarterly return on equity was 3.14 percent, below the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $77,000 on total equity of $4.9 million. The bank experienced an annualized return on average assets, or ROA, of 0.25 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.