Safe and Sound

Bank of Sun Prairie

Sun Prairie, WI
5
Star Rating
Founded in 1903, Bank of Sun Prairie is an FDIC-insured bank based in Sun Prairie, WI. The bank holds equity of $49.8 million on assets of $385.1 million, according to December 31, 2017, regulatory filings.

Thanks to the efforts of 70 full-time employees in 4 offices in WI, the bank currently holds loans and leases worth $303.6 million, including real estate loans of $264.6 million. U.S. bank customers currently have $302.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Bank of Sun Prairie 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 grade U.S. banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for account holders when a bank is experiencing financial instability. Therefore, a bank's level of capital is a key measurement of an institution's financial fortitude. From a safety and soundness perspective, the more capital, the better.

Bank of Sun Prairie exceeded the national average of 13.13 points on our test to measure the adequacy of a bank's capital, achieving a score of 16 out of a possible 30 points.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Bank of Sun Prairie's Tier 1 capital ratio was 15.57 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial challenges.

Overall, Bank of Sun Prairie held equity amounting to 12.93 percent of its assets, which exceeded the national average of 12.03 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 troubled assets, such as past-due mortgages.

Having lots of these kinds of assets means a bank could have to use capital to absorb losses, reducing 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 interest for the bank, resulting in lower earnings and potentially more risk of a failure in the future.

Bank of Sun Prairie beat out the national average of 37.49 on Bankrate's test of asset quality, racking up 40 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.72 percent of Bank of Sun Prairie'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 1.01 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 handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on Bank of Sun Prairie'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 can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank better able to withstand economic shocks. Obviously, banks that are losing money have less ability to do those things.

Bank of Sun Prairie did below-average on Bankrate's earnings test, achieving a score of 14 out of a possible 30.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by total equity. Bank of Sun Prairie's most recent annualized quarterly return on equity was 6.15 percent, below the national average of 8.10 percent.

The bank recorded net income of $3.0 million on total equity of $49.8 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.85 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.