Safe and Sound

1st Advantage Bank

Saint Peters, MO
1
Star Rating
1st Advantage Bank is an FDIC-insured bank started in 2005 and currently headquartered in Saint Peters, MO.101,548 Regulatory filings show the bank having equity of $10.3 million on $101.5 million in assets, as of December 31, 2017.

With 18 full-time employees, the bank currently holds loans and leases worth $86.3 million, including real estate loans of $75.9 million. U.S. bank customers currently have $84.7 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, 1st Advantage Bank exhibited a below-average condition, earning 2 out of 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to score U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and affords protection for depositors during times of financial instability for the bank. It follows then that a bank's level of capital is a crucial measurement of a bank's financial strength. When looking at safety and soundness, more capital is preferred.

1st Advantage Bank received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, below the national average of 13.19.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. 1st Advantage Bank's Tier 1 capital ratio was 11.84 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.67 percent. The higher the capital ratio, the better the bank will be able to weather financial difficulties.

Overall, 1st Advantage Bank held equity amounting to 10.11 percent of its assets, which was lower than the national average of 12.04 percent.

Asset Quality Score

This test is intended to try to understand how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due loans.

Having extensive holdings of these kinds of assets may eventually force a bank to use capital to cover 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 money, resulting in diminished earnings and potentially more risk of a future failure.

1st Advantage Bank scored 20 out of a possible 40 points on Bankrate's asset quality test, less than the national average of 37.70.

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of December 31, 2017, 0.62 percent of 1st Advantage 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 1.14 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . Comparing the reserve's size to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on 1st Advantage 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. A bank can retain its earnings, boosting its capital cushion, or put them to work addressing problematic loans, likely making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

1st Advantage Bank fell short of the national average on Bankrate's test of earnings, achieving a score of 8 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one important way to measure a bank's earnings. 1st Advantage Bank's most recent annualized quarterly return on equity was 4.19 percent, below the national average of 8.10 percent.

The bank reported net income of $367,000 on total equity of $10.3 million for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 0.38 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 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.