Safe and Sound

Kirkpatrick Bank

Edmond, OK
5
Star Rating
Kirkpatrick Bank is an Edmond, OK-based, FDIC-insured bank dating back to 1970. The bank has equity of $71.0 million on $830,730,000 in assets, according to June 30, 2017, regulatory filings.

U.S. bank customers have $687.7 million on deposit at 7 offices in multiple states run by 124 full-time employees. With that footprint, the bank currently holds loans and leases worth $544.8 million, including $504.1 million worth of real estate loans.

Overall, Bankrate believes that, as of June 30, 2017, Kirkpatrick Bank 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.

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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 periods of financial trouble for the bank. It follows then that when it comes to measuring an an institution's financial stability, capital is valuable. From a safety and soundness perspective, the more capital, the better.
On our test to measure capital adequacy, Kirkpatrick Bank received a score of 8 out of a possible 30 points, failing to reach the national average of 13.38.

A bank's Tier 1 capital ratio is a widely followed measure of this buffer. Kirkpatrick Bank's Tier 1 capital ratio was 11.94 percent, exceeding the 6 percent level regulators consider adequate, but lower than the national average of 25.16 percent. A higher capital ratio means the bank will be better able to weather financial difficulties.

Overall, Kirkpatrick Bank held equity amounting to 8.55 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 effect of problem assets, such as unpaid loans, on the bank's loan loss reserves and overall capitalization.

A bank with lots of these kinds of assets could eventually be forced to use capital to absorb losses, decreasing its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a failure in the future.

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

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of June 30, 2017, none of Kirkpatrick 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 troubled assets . How large that reserve is can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Kirkpatrick Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is has an effect on its long-term survivability. Earnings may be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank better prepared to withstand financial shocks. Losses, on the other hand, lessen a bank's ability to do those things.

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

One important measure of a bank's earnings is return on equity, or net income (profit, basically) divided by the total amount of equity. The most recent annualized quarterly return on equity for Kirkpatrick Bank was 13.55 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $4.7 million on total equity of $71.0 million. The bank had an annualized return on average assets, or ROA, of 1.16 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.