Safe and Sound

Bank of The Rockies, National Association

White Sulphur Sp, MT
3
Star Rating
White Sulphur Sp, MT-based Bank of The Rockies, National Association is an FDIC-insured bank founded in 1883. Regulatory filings show the bank having equity of $15.7 million on assets of $146.6 million, as of December 31, 2017.

U.S. bank customers have $129.4 million on deposit at 6 offices in MT run by 54 full-time employees. With that footprint, the bank currently holds loans and leases worth $101.1 million, $78.9 million of which are for real estate.

Overall, Bankrate believes that, as of December 31, 2017, Bank of The Rockies, National Association exhibited a generally satisfactory condition, earning 3 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 American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

When it comes to measuring an a bank's financial fortitude, capital is valuable. It acts as a buffer against losses and affords protection for accountholders when a bank is experiencing economic instability. From a safety and soundness perspective, more capital is better.

Bank of The Rockies, National Association received a score of 10 out of a possible 30 points on our test to measure capital adequacy, falling short of the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. Bank of The Rockies, National Association's Tier 1 capital ratio was 13.54 percent, exceeding the 6 percent level regulators consider adequate, 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 headwinds.

Overall, Bank of The Rockies, National Association held equity amounting to 10.69 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid loans.

Having large numbers of these kinds of assets means a bank may have to use capital to absorb losses, diminishing its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in diminished earnings and potentially more risk of a failure in the future.

Bank of The Rockies, National Association fell short of the national average of 37.49 on Bankrate's test of asset quality, racking up 24 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, 2.20 percent of Bank of The Rockies, National Association's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing how large that reserve is to the total amount of at-risk loans can be a widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Bank of The Rockies, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its safety and soundness. Earnings may be retained by the bank, giving a boost to its capital buffer, or be used to deal with problematic loans, likely making the bank more resilient in tough times. Conversely, losses reduce a bank's ability to do those things.

On Bankrate's earnings test, Bank of The Rockies, National Association scored 14 out of a possible 30, lower than the national average of 15.12.

One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. Bank of The Rockies, National Association's most recent annualized quarterly return on equity was 6.49 percent, below the national average of 8.10 percent.

The bank reported net income of $1.0 million on total equity of $15.7 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 0.71 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.