Safe and Sound

CENTRAL BANK OF ST. LOUIS

Clayton, MO
4
Star Rating
CENTRAL BANK OF ST. LOUIS is an FDIC-insured bank started in 1902 and currently based in Clayton, MO. The bank has equity of $203.3 million on $1,878,137,000 in assets, according to June 30, 2017, regulatory filings.

With 247 full-time employees in 16 offices in multiple states, the bank holds loans and leases worth $1.46 billion, including real estate loans of $1.02 billion. U.S. bank customers currently have $1.46 billion in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, CENTRAL BANK OF ST. LOUIS exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a breakdown of how the bank did on the three major criteria Bankrate used to score American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for accountholders during times of economic instability for the bank. Therefore, when it comes to measuring an a bank's financial strength, capital is crucial. When looking at safety and soundness, more capital is better.
On our test to measure capital adequacy, CENTRAL BANK OF ST. LOUIS received a score of 8 out of a possible 30 points, less than the national average of 13.38.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. CENTRAL BANK OF ST. LOUIS's Tier 1 capital ratio was 10.42 percent, exceeding the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to weather economic difficulties.

Overall, CENTRAL BANK OF ST. LOUIS held equity amounting to 10.82 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having a large number of these types of assets could eventually force a bank 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 no longer earning interest for the bank, decreasing earnings and elevating the chances of a future failure.

CENTRAL BANK OF ST. LOUIS scored 36 out of a possible 40 points on Bankrate's test of asset quality, less than the national average of 37.62.

The percentage of problem assets a bank holds compared to its total assets is a useful indicator of asset quality.As of June 30, 2017, 1.13 percent of CENTRAL BANK OF ST. LOUIS's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep 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 widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on CENTRAL BANK OF ST. LOUIS'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, giving a boost to its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

CENTRAL BANK OF ST. LOUIS received above-average marks on Bankrate's earnings test, achieving a score of 20 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. CENTRAL BANK OF ST. LOUIS's most recent annualized quarterly return on equity was 10.61 percent, above the national average of 9.28 percent.

The bank reported net income of $10.5 million on total equity of $203.3 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.10 percent, above the 1 percent deemed satisfactory in accordance with industry standards, but 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.