Safe and Sound

CoreFirst Bank & Trust

Topeka, KS
4
Star Rating
Topeka, KS-based CoreFirst Bank & Trust is an FDIC-insured bank started in 1959. As of December 31, 2017, the bank had equity of $85.2 million on $909.4 million in assets.

U.S. bank customers have $598.8 million on deposit at 16 offices in multiple states run by 266 full-time employees. With that footprint, the bank holds loans and leases worth $569.1 million, including $437.0 million worth of real estate loans.

Overall, Bankrate believes that, as of December 31, 2017, CoreFirst Bank & Trust exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for an analysis of how the bank fared on the three key criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of a bank's financial fortitude. It works as a bulwark against losses and provides protection for depositors during times of financial instability for the bank. When it comes to safety and soundness, the more capital, the better.

CoreFirst Bank & Trust finished below the national average of 13.13 on our test to measure capital adequacy, racking up 10 out of a possible 30 points.

One essential measure of this buffer is a bank's Tier 1 capital ratio. CoreFirst Bank & Trust's Tier 1 capital ratio was 12.64 percent, higher than the 6 percent level regulators consider adequate, but below the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to economic headwinds.

Overall, CoreFirst Bank & Trust held equity amounting to 9.37 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 reserves set aside to cover loan losses, as well as overall capitalization, could be affected by troubled assets, such as past-due loans.

Having large numbers of these kinds of assets may eventually force a bank to use capital to cover losses, diminishing its equity cushion. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the bank, resulting in lower earnings and potentially more risk of a future failure.

CoreFirst Bank & Trust fell below the national average of 37.49 on Bankrate's test of asset quality, racking up 32 out of a possible 40 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, 2.44 percent of CoreFirst Bank & Trust'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 troubled assets . Comparing the size of that reserve to the total amount of problem loans can be a handy indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on CoreFirst Bank & Trust'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, increasing its capital buffer, or put them to work addressing problematic loans, likely making the bank better able to withstand economic shocks. Conversely, losses take away from a bank's ability to do those things.

CoreFirst Bank & Trust scored 20 out of a possible 30 on Bankrate's test of earnings, above the national average of 15.12.

One widely used measure of a bank's earnings is return on equity, calculated by dividing net income (essentially profit) by the total amount of equity. CoreFirst Bank & Trust's most recent annualized quarterly return on equity was 11.03 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $9.2 million on total equity of $85.2 million. The bank had an annualized return on average assets, or ROA, of 1.01 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.