Safe and Sound

First Bank Kansas

Salina, KS
5
Star Rating
First Bank Kansas is a Salina, KS-based, FDIC-insured bank dating back to 1955. As of December 31, 2017, the bank held equity of $37.2 million on assets of $439.1 million.

Thanks to the efforts of 124 full-time employees in 8 offices in KS, the bank has amassed loans and leases worth $224.1 million, $168.4 million of which are for real estate. The bank currently holds $396.1 million in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, First Bank Kansas exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three key criteria Bankrate used to evaluate American banks on safety and soundness.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and as protection for account holders during periods of economic instability for the bank. Therefore, a bank's level of capital is a useful measurement of a bank's financial strength. From a safety and soundness perspective, the more capital, the better.

First Bank Kansas received a score of 8 out of a possible 30 points on our test to measure capital adequacy, lower than the national average of 13.13.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. First Bank Kansas's Tier 1 capital ratio was 15.69 percent, higher than the 6 percent level regulators consider adequate, but lower than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather economic downturns.

Overall, First Bank Kansas held equity amounting to 8.48 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to try to understand 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 a large number of these types of assets means a bank could have to use capital to absorb losses, diminishing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning money, resulting in lower earnings and potentially more risk of a future failure.

First Bank Kansas scored 40 out of a possible 40 points on Bankrate's asset quality test, better than the national average of 37.49.

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, 0.20 percent of First Bank Kansas'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 known as an "allowance for loan and lease losses" to deal with troubled assets . That reserve's size can be a helpful indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on First Bank Kansas'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 can be retained by the bank, increasing its capital cushion, or be used to address problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, reduce a bank's ability to do those things.

First Bank Kansas scored 26 out of a possible 30 on Bankrate's earnings test, beating the national average of 15.12.

One key measure of a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for First Bank Kansas was 17.90 percent, above the national average of 8.10 percent.

The bank earned net income of $6.4 million on total equity of $37.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.49 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.