Safe and Sound

Cass County Bank, Inc.

Plattsmouth, NE
2
Star Rating
Founded in 1966, Cass County Bank, Inc. is an FDIC-insured bank headquartered in Plattsmouth, NE. The bank has equity of $7.2 million on $70.1 million in assets, according to December 31, 2017, regulatory filings.

With 20 full-time employees in 2 offices in NE, the bank has amassed loans and leases worth $53.7 million, including real estate loans of $38.1 million. U.S. bank customers currently have $62.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Cass County Bank, Inc. exhibited a below-average condition, earning 2 out of 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.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a bulwark against losses and provides protection for account holders during periods of economic instability for the bank. It follows then that a bank's level of capital is a crucial measurement of an institution's financial strength. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure capital adequacy, Cass County Bank, Inc. received a score of 10 out of a possible 30 points, falling short of the national average of 13.13.

One important measure of this buffer is a bank's Tier 1 capital ratio. Cass County Bank, Inc.'s Tier 1 capital ratio was 12.15 percent, above the 6 percent level considered adequate by regulators, but less than the national average of 25.65 percent. A higher capital ratio means the bank will be better able to stand up to economic challenges.

Overall, Cass County Bank, Inc. held equity amounting to 10.23 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

Bankrate uses this test to determine the impact of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

A bank with extensive holdings of these kinds of assets could eventually be required to use capital to cover losses, diminishing its equity cushion. 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, diminishing earnings and increasing the risk of a future failure.

Cass County Bank, Inc. finished below the national average of 37.49 on Bankrate's asset quality test, racking up 24 out of a possible 40 points .

A useful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 4.68 percent of Cass County Bank, Inc.'s loans were noncurrent -- in other words, 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 to deal with troubled assets known as an "allowance for loan and lease losses." Comparing the size of that reserve to the total amount of problematic loans can be a helpful indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on Cass County Bank, Inc.'s loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, boosting its capital buffer, or use them to deal with problematic loans, potentially making the bank more resilient in times of trouble. Losses, on the other hand, lessen a bank's ability to do those things.

Cass County Bank, Inc. scored 0 out of a possible 30 on Bankrate's test of earnings, lower than the national average of 15.12.

Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. Cass County Bank, Inc.'s most recent annualized quarterly return on equity was -1.23 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $-90,000 on total equity of $7.2 million. The bank reported an annualized return on average assets, or ROA, of -0.13 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.