Safe and Sound

Coulee Bank

La Crosse, WI
5
Star Rating
La Crosse, WI-based Coulee Bank is an FDIC-insured bank started in 1961. Regulatory filings show the bank having equity of $32.5 million on $355,339,000 in assets, as of June 30, 2017.

With 61 full-time employees in 6 offices in multiple states, the bank holds loans and leases worth $262.8 million, including real estate loans of $198.9 million. U.S. bank customers currently have $283.1 million in deposits with the bank.

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

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a useful measurement of an institution's financial resilience. It works as a buffer against losses and as protection for depositors when a bank is experiencing economic trouble. From a safety and soundness perspective, the more capital, the better.
Coulee Bank scored below the national average of 13.38 on our test to measure capital adequacy, scoring 10 out of a possible 30 points.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Coulee Bank's Tier 1 capital ratio was 11.91 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.16 percent. A higher capital ratio means the bank will be better able to stand up to financial difficulties.

Overall, Coulee Bank held equity amounting to 9.14 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 troubled assets, such as past-due loans.

Having large numbers of these types of assets could eventually require a bank to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

Coulee Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, beating out the national average of 37.62.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, 0.15 percent of Coulee 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 keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is 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 Coulee Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, likely making the bank better prepared to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.

Coulee Bank scored 22 out of a possible 30 on Bankrate's test of earnings, beating the national average of 16.52.

One widely used way to measure a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Coulee Bank's most recent annualized quarterly return on equity was 12.90 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank earned net income of $2.0 million on total equity of $32.5 million. The bank reported an annualized return on average assets, or ROA, of 1.15 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.