Safe and Sound

Community Bank of Raymore

Raymore, MO
5
Star Rating
Community Bank of Raymore is a Raymore, MO-based, FDIC-insured bank started in 1979. As of June 30, 2017, the bank held equity of $20.4 million on $228,841,000 in assets.

With 49 full-time employees in 3 offices in MO, the bank has amassed loans and leases worth $129.0 million, including real estate loans of $102.5 million. U.S. bank customers currently have $206.9 million in deposits with the bank.

Overall, Bankrate believes that, as of June 30, 2017, Community Bank of Raymore exhibited a superior condition, earning a full 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three important criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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 depositors during periods of financial trouble for the bank. Therefore, when it comes to measuring an a bank's financial stability, capital is important. When looking at safety and soundness, more capital is better.
Community Bank of Raymore received a score of 8 out of a possible 30 points on our test to measure the adequacy of a bank's capital, below the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Community Bank of Raymore's Tier 1 capital ratio was 12.83 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial downturns.

Overall, Community Bank of Raymore held equity amounting to 8.93 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

Having lots of these types of assets means a bank may have to use capital to cover losses, shrinking 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, resulting in depressed earnings and potentially more risk of a failure in the future.

Community Bank of Raymore scored below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

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, none of Community Bank of Raymore'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 to handle problem assets known as an "allowance for loan and lease losses." That reserve's size can be a widely used 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 Community Bank of Raymore's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money affects its safety and soundness. Earnings can be retained by the bank, expanding its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.

Community Bank of Raymore scored 30 out of a possible 30 on Bankrate's earnings test, above the national average of 16.52.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Community Bank of Raymore's most recent annualized quarterly return on equity was 67.72 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank recorded net income of $5.8 million on total equity of $20.4 million. The bank experienced an annualized return on average assets, or ROA, of 5.22 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.