Safe and Sound

The First National Bank of Las Animas

Las Animas, CO
5
Star Rating
The First National Bank of Las Animas is an FDIC-insured bank started in 1901 and currently headquartered in Las Animas, CO. As of June 30, 2017, the bank had equity of $39.7 million on $340,731,000 in assets.

Thanks to the efforts of 70 full-time employees in 6 offices in CO, the bank currently holds loans and leases worth $251.8 million, $187.2 million of which are for real estate. The bank currently holds $289.0 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of June 30, 2017, The First National Bank of Las Animas exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three important criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a crucial measurement of a bank's financial fortitude. It works as a buffer against losses and as protection for depositors during periods of economic instability for the bank. When looking at safety and soundness, the more capital, the better.
The First National Bank of Las Animas achieved a score of 14 out of a possible 30 points on our test to measure capital adequacy, beating the national average of 13.38.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. The First National Bank of Las Animas's Tier 1 capital ratio was 13.37 percent, above the 6 percent level regulators consider adequate, but less than the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to stand up to financial headwinds.

Overall, The First National Bank of Las Animas held equity amounting to 11.66 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 capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid loans.

Having extensive holdings of these kinds of assets could eventually require a bank to use capital to absorb losses, decreasing its buffer of equity. 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 reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, The First National Bank of Las Animas scored 40 out of a possible 40 points, exceeding the national average of 37.62 points.

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, 0.04 percent of The First National Bank of Las Animas'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 maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . 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. The First National Bank of Las Animas's loan loss allowance was 4,473.91 percent of its total noncurrent loans, higher than the national average. All else being equal, the higher the ratio of loan loss allowance to noncurrent loans, the better.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. A bank can retain its earnings, giving a boost to its capital cushion, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. However, banks that are losing money are less able to do those things.

The First National Bank of Las Animas scored 28 out of a possible 30 on Bankrate's earnings test, better than the national average of 16.52.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one key measure of a bank's earnings. The First National Bank of Las Animas's most recent annualized quarterly return on equity was 19.72 percent, above the national average of 9.28 percent.

For the twelve months ended June 30, 2017, the bank reported net income of $3.9 million on total equity of $39.7 million. The bank reported an annualized return on average assets, or ROA, of 2.31 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.