Safe and Sound

Community Bank of Oak Park River Forest

Oak Park, IL
3
Star Rating
Community Bank of Oak Park River Forest is an FDIC-insured bank started in 1996 and currently based in Oak Park, IL. As of December 31, 2017, the bank had equity of $30.6 million on assets of $325.7 million.

With 73 full-time employees in 3 offices in IL, the bank holds loans and leases worth $252.6 million, including real estate loans of $197.3 million. U.S. bank customers currently have $285.4 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Community Bank of Oak Park River Forest exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three important criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of an institution's financial fortitude. It works as a buffer against losses and provides protection for depositors when a bank is experiencing financial trouble. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, Community Bank of Oak Park River Forest received a score of 10 out of a possible 30 points, failing to reach the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. Community Bank of Oak Park River Forest's Tier 1 capital ratio was 10.37 percent, exceeding 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 weather economic difficulties.

Overall, Community Bank of Oak Park River Forest held equity amounting to 9.40 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

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

Having large numbers of these kinds of assets means a bank could have 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 no longer earning interest for the bank, reducing earnings and elevating the risk of a future failure.

On Bankrate's test of asset quality, Community Bank of Oak Park River Forest scored 24 out of a possible 40 points, coming in below the national average of 37.49 points.

A handy indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.88 percent of Community Bank of Oak Park River Forest'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 maintain a reserve to deal with 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 problem assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Community Bank of Oak Park River Forest's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its long-term survivability. A bank can retain its earnings, boosting its capital buffer, or use them to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, take away from a bank's ability to do those things.

On Bankrate's test of earnings, Community Bank of Oak Park River Forest scored 14 out of a possible 30, falling short of the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, or net income (profit, basically) divided by total equity. Community Bank of Oak Park River Forest's most recent annualized quarterly return on equity was 6.72 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank recorded net income of $2.0 million on total equity of $30.6 million. The bank experienced an annualized return on average assets, or ROA, of 0.64 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.