Safe and Sound

Chambers Bank

Danville, AR
4
Star Rating
Founded in 1930, Chambers Bank is an FDIC-insured bank based in Danville, AR. Regulatory filings show the bank having equity of $93.1 million on $741,955,000 in assets, as of June 30, 2017.

With 148 full-time employees in 18 offices in AR, the bank holds loans and leases worth $605.1 million, including real estate loans of $540.8 million. U.S. bank customers currently have $606.7 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Chambers Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the bank faired on the three major criteria Bankrate used to grade American banks.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for depositors when a bank is struggling financially. Therefore, a bank's level of capital is an important measurement of a bank's financial strength. When looking at safety and soundness, more capital is better.
Chambers Bank scored above the national average of 13.38 points on our test to measure capital adequacy, achieving a score of 14 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. Chambers Bank's Tier 1 capital ratio was 13.00 percent, exceeding the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, Chambers Bank held equity amounting to 12.55 percent of its assets, which exceeded the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate 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 a large number of these types of assets means a bank may have to use capital to absorb losses, decreasing its equity buffer. 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 bank, resulting in lower earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Chambers Bank scored 32 out of a possible 40 points, lower than the national average of 37.62 points.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of June 30, 2017, 0.23 percent of Chambers 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 keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the that reserve's size to the total amount of problematic loans can be a useful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Chambers Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its safety and soundness. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, reduce a bank's ability to do those things.

Chambers Bank outperformed the average on Bankrate's test of earnings, achieving a score of 22 out of a possible 30.

Return on equity, calculated by dividing net income (profit, basically) by total equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for Chambers Bank was 14.37 percent, above the national average of 9.28 percent.

The bank recorded net income of $6.5 million on total equity of $93.1 million for the twelve months ended June 30, 2017. The bank reported an annualized return on average assets, or ROA, of 1.77 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.