Safe and Sound

Community Pride Bank

Isanti, MN
5
Star Rating
Isanti, MN-based Community Pride Bank is an FDIC-insured bank started in 2000. As of December 31, 2017, the bank had equity of $13.1 million on $115.7 million in assets.

Thanks to the efforts of 22 full-time employees in 2 offices in MN, the bank currently holds loans and leases worth $83.2 million, including real estate loans of $64.6 million. The bank currently holds $101.4 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Community Pride Bank 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 important criteria Bankrate used to evaluate American banks on safety and soundness.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and provides protection for account holders when a bank is struggling financially. It follows then that when it comes to measuring an an institution's financial strength, capital is valuable. From a safety and soundness perspective, the more capital, the better.

On our test to measure capital adequacy, Community Pride Bank received a score of 12 out of a possible 30 points, falling short of the national average of 13.13.

One essential measure of this buffer is a bank's Tier 1 capital ratio. Community Pride Bank's Tier 1 capital ratio was 14.15 percent, higher than the 6 percent level regulators consider adequate, 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, Community Pride Bank held equity amounting to 11.35 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

In this test, Bankrate tries to estimate the impact of troubled assets, such as past-due mortgages, on the bank's loan loss reserves and overall capitalization.

Having extensive holdings of these kinds of assets suggests a bank could have 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 no longer earning interest for the bank, resulting in diminished earnings and potentially more risk of a future failure.

Community Pride Bank 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 useful indicator of asset quality.As of December 31, 2017, 0.22 percent of Community Pride Bank's loans were noncurrent, meaning 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 keep a reserve to handle problem assets known as an "allowance for loan and lease losses." How large that reserve is can be a handy indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on Community Pride Bank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, expanding its capital buffer, or be used to address problematic loans, likely making the bank more resilient in times of trouble. Banks that are losing money, however, have less ability to do those things.

Community Pride Bank received above-average marks on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

Return on equity, calculated by dividing net income (essentially, profit) by total equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for Community Pride Bank was 10.67 percent, above the national average of 8.10 percent.

The bank earned net income of $1.4 million on total equity of $13.1 million for the twelve months ended December 31, 2017. The bank had an annualized return on average assets, or ROA, of 1.23 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.