Safe and Sound

ClearPoint Federal Bank & Trust

Batesville, IN
5
Star Rating
ClearPoint Federal Bank & Trust is a Batesville, IN-based, FDIC-insured bank that opened its doors in 1998. As of December 31, 2017, the bank held equity of $14.7 million on $92.4 million in assets.

Thanks to the efforts of 25 full-time employees, the bank has amassed loans and leases worth $0, including $0 worth of real estate loans. The bank currently holds $77.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, ClearPoint Federal Bank & Trust exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three major criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a bank's financial strength. It works as a buffer against losses and affords protection for accountholders when a bank is experiencing financial trouble. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, ClearPoint Federal Bank & Trust racked up 22 out of a possible 30 points, beating the national average of 13.13.

One way to measure this buffer is looking at a bank's Tier 1 capital ratio. ClearPoint Federal Bank & Trust's Tier 1 capital ratio was 46.55 percent, higher than the 6 percent level considered adequate by regulators, and exceeding the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic headwinds.

Overall, ClearPoint Federal Bank & Trust held equity amounting to 15.87 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

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

Having lots of these types of assets could eventually require a bank to use capital to cover losses, decreasing its buffer of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, reducing earnings and elevating the risk of a failure in the future.

On Bankrate's test of asset quality, ClearPoint Federal Bank & Trust scored 40 out of a possible 40 points, above the national average of 37.49 points.

A widely used indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets.

Banks keep a reserve to deal with problem 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 widely used indicator when evaluating a bank's ability to manage problem assets. Unfortunately, the FDIC did not provide information on ClearPoint Federal Bank & Trust'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 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 better prepared to withstand financial trouble. Losses, on the other hand, reduce a bank's ability to do those things.

ClearPoint Federal Bank & Trust did above-average on Bankrate's earnings test, achieving a score of 16 out of a possible 30.

One important measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by the total amount of equity. ClearPoint Federal Bank & Trust's most recent annualized quarterly return on equity was 6.98 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $1.1 million on total equity of $14.7 million. The bank had an annualized return on average assets, or ROA, of 1.16 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above 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.